Michael Saylor’s company, Strategy, is nearing a critical valuation threshold as its market-to-net-asset-value multiple hovers just above levels that could diminish its appeal as a proxy for Bitcoin exposure. Despite a modest rise in shares, the stock remains significantly down from its peak, triggering concerns about its value. With a market valuation close to its Bitcoin holdings, Strategy’s equity appeal is at risk if the mNAV falls below 1.0. The company’s balance sheet shows tension, with large Bitcoin reserves but a lower market capitalization. If the mNAV slips below 1.0, Strategy’s ability to raise capital through share sales becomes challenging and dilutive. Management has taken steps to mitigate funding risks, raising $747.8 million through stock sales. Executives have emphasized selling Bitcoin as a last resort, aiming to maintain investor confidence and financial stability. The uncertainty over Strategy’s valuation and Bitcoin holdings has led to significant stock price volatility, making it the worst performer in the Nasdaq-100 last year. The divergence between Bitcoin’s performance and Strategy’s equity weakness has sparked debates over the company’s role as an investment vehicle versus an operating business. Critics have pointed to Strategy’s drawdown as evidence that aggressive Bitcoin accumulation has negatively impacted shareholders.

Read more at Yahoo Finance: Michael Saylor’s Strategy Nears “Danger Zone” as mNAV Threatens to Slip Below 1