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At the BTC Prague conference, Strategy Executive Chairman Michael Saylor and Strike CEO Jack Mallers engaged in a debate regarding the valuation and capital structure of Strategy (MSTR). Mallers questioned Saylor on how investors should define multiple-to-net asset value (mNAV), specifically regarding the inclusion of out-of-the-money convertible debt. Additionally, the two discussed the concept of dilution, with Mallers challenging Saylor's assertion that equity issuance for cash is not inherently dilutive.
Saylor maintained that mNAV is only one of several valid valuation frameworks, noting that investors may also utilize gross assets per share or net assets per share. Regarding dilution, Saylor argued that issuing equity to acquire tangible assets like cash or bitcoin strengthens the company's balance sheet and creditworthiness rather than diluting shareholder value. He cited Strategy's recent addition of approximately $100 million to its U.S. dollar reserves as an example of this strategy in practice.
Michael Saylor and Jack Mallers debated Strategy's valuation metrics and dilution at BTC Prague.
Mallers questioned the inclusion of out-of-the-money convertible debt in mNAV calculations.
Saylor argued that issuing equity for cash or bitcoin is not inherently dilutive because it provides the company with tangible assets.
Strategy currently holds approximately $1 billion in U.S. dollar reserves.
Saylor stated that mNAV is just one of several frameworks for evaluating the company, alongside gross and net assets per share.
The two differ on how to interpret Strategy's capital structure, specifically whether issuing equity for cash is dilutive and how to properly calculate net asset value metrics.
Saylor argues that issuing equity for cash or bitcoin is not dilutive because shareholders receive tangible assets in return, which strengthens the company's balance sheet.
mNAV stands for multiple-to-net asset value, a metric used to assess company valuation that can include common equity, preferred equity, and convertible debt.
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