MSTR’s Mysterious mNAV: Solving the True Value Equation
How the hell do you value MicroStrategy?
One day, it’s a Bitcoin ETF, like BlackRock’s IBIT.
Then they’re a Bitcoin treasury company.
Now, they’re claiming to be a Bitcoin Refinery Company (whatever that means).
You’ve probably seen plenty of arguments on X over how MSTR should be valued.
The reality is that they’re all wrong. And they don’t matter.
What matters to an MSTR investor is how the market values MSTR and how that might change.
To add some data-driven clarity, this article will examine what our models tell us about MSTR’s mysterious mNAV.
mNAV on the Move: Decoding the Trends
The multiple of net asset value (mNAV) is the ratio of MSTR's price to the value of the bitcoin they hold per share. As the chart below shows, MSTR’s mNAV has been trending up.
· In the early days, MSTR held BTC instead of cash and didn’t do much with it except buy more when they had spare cash. Because MSTR was the first to do this, it traded at a slight premium to its underlying Bitcoin because many cannot hold Bitcoin directly.
· They took on some debt to buy more Bitcoin, but when the Bitcoin ETFs were approved in early 2024, this edge appeared to have vanished, and MSTR’s mNAV plummeted back to 1.2.
· However, shortly after, once the options traders realised that MSTR was a leverage BTC play and they could trade MSTR’s volatility, it rose from the ashes to a peak mNAV of 3.2 in March 2024.
· Then, in August 2024, they started with their aggressive strategy of selling shares (ATM) and convertible bonds to raise even more money to buy more bitcoin and focus on BTC Yield, and the mNAV shot to 4 before crashing back to less than two a week ago.
Unpacking mNAV: A Fresh Take on MSTR’s Valuation
So, how can we calculate the ‘correct’ mNAV for MSTR?
You can’t! There’s just no established way to value MSTR’s unique business model.
The best way to value something that can’t be valued is to look at how the market currently prices it, understand its business model, and project that forward.
Unlike TradFI, our MSTR Fair Value Model doesn’t try to understand the fundamentals, earnings, or P:E ratios. Instead, we look at the relationship between BTC Value Per Share and the MSTR price.
The chart below shows a robust trend (R2 = 0.97). MSTR’s true mNAV is baked into this relationship. As their BTC per value per share grows, so does the mNAV.
MSTR’s Trajectory: The Numbers Behind the Next Big Move
Our MSTR Fair Value Model model uses past Bitcoin cycles to predict where BTC might be headed in the coming months.
If everything repeats perfectly (which it won’t), we are destined for a cycle peak of around $280k in October 2025 if BTC reaches the 99th percentile quantile.
We have also calculated the BTC Yield required to match the Ballistic Acceleration Model (which is based on the relationship between BTC and MSTR’s price). As you can see in the chart below, it nicely matches MSTR’s aggressive BTC stacking since August 2024. They’re currently just ahead of schedule.
While MSTR outlined a target BTC Yield of 6-10% per year for the next three years in their Q3 earnings report, the modelled BTC Yield in the chart above is 0.33% per day, which equates to 2.3% per week or 230% per year. This could be the biggest case of underpromise and overdeliver in financial history.
Combining the projected BTC per share and BTC price, we can predict where MSTR might be headed in the next few months.
The chart below shows the forecast MSTR price using the Ballistic Acceleration and Fair Value Model. The dotted range that MSTR trades in relative to the Fair Value Model, with MSTR currently sitting at the 16th percentile, is poised for another swing to the upside in the foreseeable future.
Riding the mNAV Wave: What to Expect Next
If we divide the forecast BTC Fair Value Per Share by the projected BTC per diluted share, we get a theoretical mNAV (shown in orange in the chart below).
Few seem to comprehend the impact of MSTR’s voracious and relentless buying of more Bitcoin (enabled by the ATM, convertible bonds, preferred stock, etc), which drives up the mNAV. Notice the kick-up in the theoretical fair value from November 2024 since they started stacking hard!
The model also forecasts a steadily growing mNAV, reaching 5.8 at the end of 2025. This is not unreasonable as more people understand that MSTR is growing from a BTC treasury company to a Bitcoin refinery and the company with the most Bitcoin in the world that no one can catch!
While they’re currently focusing on stacking as much Bitcoin as possible, it’s not hard to imagine how MSTR could monetise their Bitcoin stack in the future to make it much more valuable than their net assets.
What’s Fair for MSTR’s mNAV? A Battle of Perspectives
The 1.0 mNAV bear will likely think this is outrageous, while the MSTR bulls, who see MicroStrategy as having a powerful position at the centre of the future of money, might think this is still cheap.
It’ll be interesting to see how this plays out. MSTR releases its Q4 earnings report in February, and then it can count the growth in its bitcoin stack as earnings post-FASB later in the year and show a forward price-to-earnings ratio that might blow TradFI’s minds!
In the meantime, the smart money will do the research and likely try to front-run this and get on board before it gets included in more indexes, which will buy MSTR based on its rapidly rising market cap as a % of the whole index, regardless of price.
However it plays out, we’ll keep you posted to highlight what the data reveals.
Feel free to leave a comment below with your thoughts on how MSTR should be valued, given its unique business model, which looks set to dominate the modern financial market.