I Am Nerd/Techie Fighting $BTC FUD | Bitcoin≠Crypto | A.I. Super-User | Founding Member: @TNorth | Contributor: @BitcoinForCorps | Speak It Into Existence
Joined December 2009
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Jun 11
What is mNAV: @jackmallers question to @saylor on mNAV has a lot of people talking.
I think most conversations are missing the point.
Here are some of my thoughts on mNAV from my appearance on the @OneChairPod
This holds true for $MSTR and all $BTC Treasury Companies.
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While I get the drive for novel valuation models for $MSTR, we must recognize what our equity actually represents.
CEBE | BPS | BTC Yield are KPIs not valuation frameworks or benchmarks.
Whether using CEBE or standard BPS, a "per share" metric of $BTC holdings is essentially a backward looking snapshot of asset accumulation.
Because a treasury company must constantly alter its share count (either issuing common equity to buy $BTC or fund dividend obligations), BPS is a moving, oscillating target.
Market valuation is forward looking & dynamic. Equating a point in time measure of capital efficiency with "value" or performance misses the reality of what these equities are: Sentiment driven optionality engines.
Market participats treat these equities, especially $MSTR, as powerful vehicles for $BTC exposure, not as per share allocations of an asset they have no legal claim to.
BPS measures Bitcoin per common share before senior claims. CEBE BPS measures Bitcoin per common share after senior claims. CEBE is the conservative risk metric. BPS is the common equity growth metric. BTC Yield measures BPS execution.
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$MSTR: I view mNAV (in all it's formulations) as an indicator of market sentiment - Here @btc_overflow shows why it's also a "noisy" potential valuation metric and a moving goalpost that needs to be assessed with context.
You simply can't look at mNAV in isolation to judge the health of a Bitcoin Treasury Company. You need to know why the numbers are moving.
The latest smear tactic has been to say "look at activity below 1x basic mNAV, it reveals equity destruction."
The trick relies on pretending that liabilities don't exist.
Market Cap / Total Asset Value, by definition, is not multiple to "net" asset value. It matches the market's estimate of the company's net assets plus or minus a premium against the company's total (not net) assets.
Let's consider a hypothetical. To make the math easy we'll assume the market always values the company at P/B = 1x.
The company starts at $1B market cap with $1B of bitcoin. No debt, no prefs, no liabilities.
P/B = $1B / $1B = 1x
Basic mNAV = $1B / $1B = 1x
Now let's say the company takes on $500M of debt to buy $500M of bitcoin. We'll ignore any interest for the moment and just consider the principal. Bitcoin price remains unchanged for the time being.
P/B = $1B / ($1B $500M - $500M) = 1x
Basic mNAV = $1B / ($1B $500M) = 0.67x
Now what if the company takes on a further $500M of debt to buy a further $500M of bitcoin. Bitcoin price still remaining unchanged.
P/B = $1B / ($1B $1B - $1B) = 1x
Basic mNAV = $1B / ($1B $1B) = 0.5x
Price to book remains unchanged in all 3 cases because the new bitcoin purchases net out against the debt incurred.
Basic mNAV alarmists would tell you that "discounted" mNAV signals something is deeply wrong with the stock, when in reality no discounting took place and P/B is simply taking into account liabilities as it should. In this case, basic mNAV below 1x simply reflects the company's leverage.
Now, what if, continuing on from the last scenario, the stock started trading at $1.5B / $1B = 1.5x P/B?
Basic mNAV = $1.5B / $2B = 0.75x
Are shares valued less than *net* bitcoin exposure here? Obviously not. P/B is 1.5x, shares are at a 50% premium to net bitcoin exposure.
mNAV in isolation, no matter the formulation, doesn't tell the whole story. You have to look deeper.
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Jun 13
$SPCX | $BTC: With the @SpaceX IPO we have a new reality -
The Mag7 is now the Mag8
The A.I. | Technology boom shows no signs of slowing and we are in the early stages of Industrial Revolution 2.0
$SPCX holds 18,712 $BTC
$TSLA holds 11,509 $BTC
Two of the most valuable companies in the Mag8 (25%) own $BTC.
Jun 13
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Jun 13
Government is stepping in to prevent access to an LLM but you got people still calling it a "bubble".
"...The net effect of this order is that we must abruptly disable Fable 5 and Mythos 5 for all our customers to ensure compliance..."
Jun 13
The US government, citing national security authorities, has issued an export control directive to suspend all access to Fable 5 and Mythos 5 by any foreign national, whether inside or outside the United States, including foreign national Anthropic employees.
The net effect of this order is that we must abruptly disable Fable 5 and Mythos 5 for all our customers to ensure compliance.
Access to all other Claude models is not affected.
We apologize for this disruption to our customers. We believe this is a misunderstanding and are working to restore access as soon as possible.
Read our full statement: anthropic.com/news/fable-myt…
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Jun 10
I have referred to $STRC | $SATA as Bitcoin-Derivative-like instruments. Here is why:
For $STRC, the daily return correlation (Rho), with $BTC is 0.58, and its 30 Day rolling Rho has reached as high as 0.86.
When $BTC moves, $STRC tends to move with it.
That is strong daily $BTC co-movement for a preferred equity instrument.
$BTC also explains 34.1% of $STRC daily return variance by itself. This is not a flaw or criticism; it is a structural and mechanical reality.
$BTC is the nexus of the entire capital stack.
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Jun 12
Jun 12
We will see how $STRC | $SATA close the day, but $SATA is much smaller, roughly 1/40th the market cap of $STRC, which may help explain why it can move back toward par more quickly. $BTC has also been up recently.
Since I did this analysis for $SATA as well, I can give an idea of how these have traded so far: when $BTC is up, $SATA has higher beta than $STRC, but slightly lower R2.
What this means is $SATA reacts with more amplitude when $BTC is up, but $BTC does not explain more of its positive daily return variance.
When BTC is down however, $SATA has both higher beta and higher R2 than $STRC. That means $SATA has shown stronger downside sensitivity and more $BTC explained daily return variance when $BTC is moving lower.
They both move like $BTC derivatives, just in different ways.
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Jun 12
Hey @RHodls take a look at this thread and the replies below.
Everyone is focused on the operational | issuance angle and assumes dividend frequency is the main lever.
However, I think the structural $BTC derivative nature of these offerings is the bigger driver of how $STRC and $SATA actually trade and recover.
Daily dividends are a mitigating improvement for certain frictions, but they don't address the root cause of what is causing the trading patterns.
With both, we are dealing with variance from the parent equity and heavy influence from $BTC and then how the offerings trade on their own (ex div dates, arb attempts, etc.)
The dividends can only attempt to address the last volatility surface.
Food for thought.
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Jun 12
Love to see @RothenbergBrian coming off the top rope to call @OnrampBitcoin | @GlennOnrampBTC out on their clearly motivated attack on $MSTR and $STRC.
Onramp has been running a campaign against $STRC | $BTC backed preferreds while trying to sell their own custody and LP funds. Cute.
Bitcoin only LP fund, great. And I can confirm they do pitch it to Onramp users, several times in fact.
But look at how they tell you to beat the treasury company preferreds: Bitcoin treasuries.
x.com/glennonrampbtc/status/…
Not exactly sure what we’re doing here if we’re investing in U.S. treasuries alongside Bitcoin.
It was also extra special for them to call Strive’s regulated securities speculative when they are pitching a less regulated venture fund. I guess it’s only a speculative product if you’re not profiting from it.
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Jun 12
$MSTR: @saylor the Bitcoiner hasn't sold $BTC. @Strategy the Company, of which he is Chairman, will sell advantageously.
People need to understand when he's speaking as a "Bitcoiner" or as a Chairman. Because I'm not an absolutist or engagement farmer, I appreciate the nuance.
Jun 4
$BTC | $MSTR: SAYLOR SOLD BITCOIN!!!
It's really not a big deal, and @Strategy has sold $BTC before. I share some of my thoughts in this quick clip from my sit-down with @ideacasino
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Jun 4
$BTC | $MSTR: SAYLOR SOLD BITCOIN!!!
It's really not a big deal, and @Strategy has sold $BTC before. I share some of my thoughts in this quick clip from my sit-down with @ideacasino
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Jun 11
$BTC | $MSTR: I said @saylor speaks to different cohorts.
Here he is saying as much -
(Reminder: He owns over 17,000 $BTC and to my knowledge he hasn't sold any.)
"I said to you to never sell your Bitcoin. I never said that the company would never sell its Bitcoin.”
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Jun 11
Jun 11
BITCOIN WIZARD LIVE - BTC, MSTR, AI w/ ADRIAN MORRIS! x.com/i/broadcasts/1kKzDDWpY…
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Jun 10
Jun 10
If people realized what and who STRC now competes with, they would understand the recent social campaign against it
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Jun 10
People need a target for their frustrations and doom narratives. Market is down, @saylor is (unfortunately) filling that role.
Michael has been a tremendous positive for $BTC.
I think | believe that, long-term, $MSTR will be even more of a success.
That said, I have to disagree here.
Because of his reach (whether he intends it or not) people will view his retweet(s) as endorsements or support.
Some (like me) can view this with nuance, but most won't.
Not fair, but that's what it is.
Jun 10
My beliefs: Retweets are notifications, not endorsements. Constructive dialogue leads to better outcomes. Bitcoin is hope and economic empowerment for everyone. Every good-faith effort to strengthen the network should be welcomed.
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Jun 9
$BTC | $MSTR: $BTC Yield | $BTC Per Share are not valuation metrics, they are KPIs. Treat them as such, do not use them to fit flawed narratives, or valuation frameworks.
Jun 9
The document you cite clearly states that BTC Yield is a narrow KPI used to assess per-share accretion solely as it pertains to bitcoin holdings. It is not a measure of financial performance, valuation, liquidity, ROI, book value, or stockholder return. Full financial analysis requires a more comprehensive review of our financial statements and SEC disclosures.
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