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The discussion around Strategy’s mNAV calculation and perceived dilution has resurfaced, with Michael Saylor maintaining that issuing equity in exchange for cash ultimately strengthens shareholder value rather than diluting it.
The latest exchange over Strategy’s (MSTR) capital structure took place at BTC Prague, where Executive Chairman Michael Saylor and Strike and Twenty One Capital (XXI) CEO Jack Mallers debated how investors should interpret the company’s increasingly complex balance sheet.
Mallers questioned Saylor’s definition of multiple-to-net asset value (mNAV), pointing out that some market participants include out-of-the-money convertible securities in their calculations, and asked whether Saylor agrees with that approach. Strategy currently holds about $6.7 billion in convertible debt that is out of the money, meaning it would not convert into equity at the current share price of roughly $115.
He also pressed Saylor on dilution, asking what would qualify as a dilutive transaction if raising equity for cash is not considered dilutive.
Saylor responded that mNAV can be measured in different ways, including by factoring in the notional value of convertible debt, common equity, and preferred shares. However, he argued that mNAV is just one of several valuation frameworks. Investors can also look at metrics such as gross or net assets per share, which may exclude certain liabilities like convertible debt or preferred equity. He added that the distinction becomes less meaningful when those obligations make up a small portion of the overall balance sheet.
On dilution, Saylor argued that equity issuance backed by cash is not inherently negative for shareholders, since the company receives a real asset in return. He said such capital raises strengthen the balance sheet, increase financial flexibility, and improve creditworthiness. As an example, he cited Strategy’s recent addition of roughly $100 million in U.S. dollar reserves, bringing total cash holdings to about $1 billion.
Meanwhile, some analysts continue to debate whether recent Bitcoin ETF outflows are driven by capital rotation into anticipated IPOs such as SpaceX and Anthropic, though Sygnum’s Fabian Dori suggests market data may point to a different explanation.
