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521 sats \ 12 replies \ @grayruby 16 Jun \ on: What do you think is a fair mNAV for Strategy? bitcoin
Technically it should be below one. There is no investor claim to the Bitcoin so in the event of a bankruptcy or dissolution of the business they would need to liquidate their holdings. Even if they did that very strategically it is bound to move the price downward fairly significantly, which means your fiat claim will ultimately be worth less than the nav at time of dissolution. This doesn't account for any other risks like government confiscation or MSTR losing their keys or Coinbase rehypothecating the coins etc.
However, due to the their ability to exploit the capital markets and convert shares into Bitcoin I do understand why it trades at a premium. Ultimately as long as this exploit is available to them I would say 1-1.5 is reasonable even though technically it should probably trade below 1 to account for even unlikely risks.
I think the calculation would be different in a takeover scenario where another company trying to buy MSTR would need to pay up to acquire them and their bitcoin stash.
Technically it should be below one. There is no investor claim to the Bitcoin so in the event of a bankruptcy or dissolution of the business they would need to liquidate their holdings.
You are 100% correct, but if that applied it would mean every non-dividend paying stock (GOOG, META, etc) should also be <1 NAV
If you owned 1 share of every listed stock, your dividend yield would be about 1.6% - which is an insanely low number. So to me that says that the market is about 5x overvalued.
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If you aren't being paid a dividend, exactly what value are you personally accruing from owning GOOG?
I would like you to invest $10,000 in my lemonade stand. I will never pay you a dividend, but I will give you a piece of paper that says you own a share.....maybe you can sell that to someone else for $15,000 in the future. Sounds good?
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You're partially right.
Here's the flipside: if I see in your business plan that you will reinvest the money that could go to my dividend into more lemonade stands, then I invest in your future growth by not cashing out the dividend
Because if you're an awesome company then you retaining the few % you'd pay out to investors could instead help growth into a lemonstand empire.
Now if you would propose I give you 10k for 5k worth of BTC because your lemon business is running at a loss cuz you suck at lemonade, I'd just lmao at your proposal and not exchange my 10M sats for your pathetic lil scheme.
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So lets assume my prospectus said I wouldn't pay dividends for next 10 years while we were in growth phase.
What would a dividend in 10 years need to be to make financial sense for you to lock up that money now? So using our numbers....you gave me $10,000 today. What type of dividend are you expecting in 10 years to make that a "good investment"?
so I could sell if I need liquidity
And the person that would buy your share would be in the same boat? They would be buying based on future dividend?
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What type of dividend are you expecting in 10 years to make that a "good investment"?
If you have one lemonade stand today and the plan is for 1k stands? I'd expect about a 5000x, especially since a 10k investment for a lemonade stand means I'm your only investor and I'd own 20% of your business. The amount of competence you'd have to show me is going be insane but assuming you're super competent, hell yeah. Let's make some money. You'll make a lot more than me at 5000x so we be sippin Cris after those 10y.
And the person that would buy your share would be in the same boat? They would be buying based on future dividend?
They'd be buying on the expectation of profit.
It depends on when I sell. Maybe I sell some halfway at 500x and there's still a lot of growth (10x) to be had.
If close to the 10y, they'd buy for (a) control or (b) dividends beating bonds at a stable valuation outlook. Different goal than my risk-taking to seed you.
what dude said.
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Technically it should be below one. There is no investor claim to the Bitcoin so in the event of a bankruptcy or dissolution of the business they would need to liquidate their holdings. Even if they did that very strategically it is bound to move the price downward fairly significantly, which means your fiat claim will ultimately be worth less than the nav at time of dissolution. This doesn't account for any other risks like government confiscation or MSTR losing their keys or Coinbase rehypothecating the coins etc.
Good point about the liquidation value, probably would end up like FTX, where people had their holdings paid out in Fiat in the worst possible valuation.
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