Michael Saylor and Jack Mallers go toe-to-toe over Strategy’s bitcoin reporting metrics
The two bitcoin treasury leaders renewed the debate over Strategy’s mNAV and dilution, with Saylor arguing that equity issuance for cash strengthens, rather than dilutes, shareholders.
What to know:
- Michael Saylor and Jack Mallers debated how investors should assess Strategy’s valuation at BTC Prague on Wednesday.
- Saylor said investors can calculate Strategy’s mNAV using common equity, preferred equity and convertible debt, but argued that gross assets per share and net assets per share are equally valid valuation frameworks.
- Defending Strategy’s capital raises, Saylor said issuing equity for cash or bitcoin is not inherently dilutive because shareholders receive tangible assets in return
Mallers also challenged Saylor’s view on dilution, asking for an example of a dilutive transaction if issuing equity for cash is not considered dilutive.
Saylor responded that mNAV can be calculated by including the notional value of convertible debt, common equity and preferred equity. However, he argued that mNAV is only one valuation framework. Investors can also evaluate gross assets per share and net assets per share, which may exclude preferred equity or convertible debt from the calculation. According to Saylor, the distinction matters less when debt and preferred equity represent only a small portion of the company’s overall asset base.
On dilution, Saylor argued that issuing equity for cash is not inherently dilutive because shareholders receive a tangible asset in return, whether cash or bitcoin. He said raising capital strengthens the balance sheet, expands the capital base and improves creditworthiness. As an example, Saylor pointed to Strategy’s recent addition of approximately $100 million to its U.S. dollar reserves, bringing the total to roughly $1 billion.
