BlockBeats News, June 27th, Strategy (MSTR)'s mNAV has fallen below 1, indicating that the market currently values the company at less than the value of its held Bitcoin. This is unusual for Michael Saylor-led Strategy. Over the years, investors have consistently assigned a valuation to Strategy that is higher than the value of its Bitcoin holdings, allowing it to flexibly finance when needed, a strategy that Saylor and his team have taken full advantage of.

Currently, Strategy's stock price has dropped to around $82, a decrease of about 85% from its historical high in November 2024, bringing the company's market value down to around $50.4 billion. Meanwhile, with the price of Bitcoin at around $60,000, the value of Bitcoin held by Strategy is approximately $51.1 billion. This means that the market's valuation of the entire company is now lower than the value of its held Bitcoin.

At the current valuation level, issuing new shares by Strategy would be dilutive as the company would essentially be selling equity at a price lower than the underlying asset value. While this does not mean that Strategy cannot continue to issue new shares, financing at the current valuation level could prompt further criticism. Previously, Strategy's recent Bitcoin purchases have diluted common shareholders and sparked community opposition.

The market is concerned that Strategy is increasingly resembling a closed-end fund rather than an operating company. Similar instruments typically trade at a premium to the underlying Bitcoin holdings during strong demand but may see a long-term discount after investor sentiment turns weaker. However, unlike traditional closed-end trusts, Strategy still has various tools at its disposal, including issuing debt or equity when accretive, redeeming or refinancing securities, generating operational cash flow through its software business, and actively managing its capital structure.