MicroStrategy Drops mNAV Cap to Fund Bitcoin Accumulation
MicroStrategy has removed its 2.5× mNAV premium threshold. It can now issue new shares below 2.5 times its Bitcoin holdings. The updated equity financing policy gives Michael Saylor’s team more flexibility to raise capital for Bitcoin accumulation. Last week, MicroStrategy bought 430 BTC for $51.4 million, bringing total reserves to 629,376 BTC at an average cost of $73,320 and generating over $26 billion in unrealised gains. Despite significant Bitcoin reserves, MicroStrategy’s stock is down 22% since November, underperforming Bitcoin’s 23% rally. Traders worry about dilution risk and demand for the preferred equity program. Increased competition from Bitcoin ETFs and crypto treasury firms adds pressure. Analysts say the policy change makes equity financing more opportunistic for future Bitcoin purchases but highlights sustainability concerns.
Bullish
MicroStrategy’s removal of the mNAV premium threshold allows it to issue shares more freely to fund Bitcoin accumulation. In the short term, the equity issuance may not directly affect Bitcoin’s price but adds potential buying pressure. Over the long term, sustained corporate purchases by MicroStrategy could support Bitcoin demand and price. While dilution risk may weigh on investor sentiment, the policy change signals continued Bitcoin accumulation, which is generally bullish for market stability and price.