MicroStrategy abandons MSTR dilution promise after mNAV drop | Protos
On July 31, MicroStrategy (MSTR) published explicit forward guidance, “We will not issue MSTR below 2.5x mNAV except to pay interest and dividends.” Fast forward to this morning, and founder Michael Saylor has modified that guidance entirely, allowing dilution of MicroStrategy shareholders “when otherwise deemed advantageous to the company.” That remarkable about-face leaned heavily on the boilerplate disclaimer in its Q2 earnings that states, “Actual results may differ materially from these forward-looking statements.” MicroStrategy is the world’s largest bitcoin treasury company, holding $73 billion worth of BTC. Unlike most companies, investors primarily value its common stock not on a traditional earnings multiple but, instead, on a multiple to Net Asset Value or ‘mNAV.’ Over time, the company has sold various forms of debt and dividend-yielding preferred shares to raise cash to buy bitcoin. These non-dilutive sales accrete bitcoin holdings for MSTR shareholders and ra...