Bitcoin faced another challenging day in the markets, experiencing a nearly 3% decline to $98,600, a downturn that also impacted MicroStrategy (MSTR), the largest corporate holder of the cryptocurrency. MSTR shares fell by 6.6%, bringing the stock down to $210, a price not seen since the days leading up to Donald Trump’s election last November. Year-to-date, MSTR has decreased by 30% and 36% compared to last year, though the company’s strategy of accumulating Bitcoin since August 2020 has resulted in substantial gains.
The drop in MSTR shares relative to Bitcoin’s value has led some analysts and investors on social media to suggest that the stock is now in “buy territory.” Currently, MicroStrategy holds 641,692 Bitcoin, which amounts to about $63.2 billion, exceeding its current market cap of $60 billion. However, this valuation does not account for the company’s preferred shares and debt, both of which hold preferential claims over common stock.
When these factors are considered, MicroStrategy’s enterprise value rises to $75.4 billion, now approximately 20% higher than the worth of its Bitcoin holdings. According to their dashboard, the market net asset value (mNAV) stood at 1.19 at the time of reporting. This data suggests that while MSTR stock may appear to be undervalued or overvalued, it is not currently offering a discount in relation to the company’s Bitcoin assets.
Despite the current market turmoil, the long-term strategy of holding Bitcoin continues to position MicroStrategy at an advantageous point for future growth. As the cryptocurrency market fluctuates, investors remain hopeful about possible rebounds and the potential for sustained value in Bitcoin and related assets.