MicroStrategy’s mNAV Drops to 0.99, Cash Coverage Slips to 9.8 Months
MSTR•MicroStrategy’s mNAV ratio fell to 0.99 for the first time, as its 847,363 Bitcoin holdings worth $50.7 billion trade below market capitalization. The firm holds $1.4 billion cash versus $1.71 billion in annual dividends (9.8 months coverage), carries $6.75 billion debt at 11% leverage and faces a securities probe over executive disclosures.
1. mNAV Ratio Drops Below One
MicroStrategy’s market-to-net-asset-value (mNAV) ratio declined to 0.99, marking the first time shareholders have refused to pay a premium over the 847,363 Bitcoin assets on the balance sheet valued at $50.7 billion. This shift undermines the company’s capital-raising and bitcoin acquisition strategy.
2. Cash Reserves, Dividends and Leverage
The firm reported $1.4 billion in USD reserves against $1.71 billion in annual dividend obligations, equating to just 9.8 months of coverage. Additionally, MicroStrategy carries $6.75 billion of debt at 11% net leverage alongside $15.5 billion in preferred securities, tightening financial flexibility.
3. Analyst Recommendations and Risks
Analysts propose raising the STRC dividend by roughly 50 basis points or liquidating at least $3 billion of Bitcoin to bolster cash reserves. Investors warn that bankruptcy risk could intensify if Bitcoin holdings remain illiquid and the securities probe over executive disclosures proceeds.
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