343PG on Nostr: Here's a question - what have a) Craig Wright, and b) the MSTR mNAV value, got in ...
Here's a question - what have a) Craig Wright, and b) the MSTR mNAV value, got in common? Some (unoriginal) thoughts about what MSTR's market value might end up as, relative to the net asset value of their bitcoin.
The idea of mNAV (multiple of net asset value) being 1 for MSTR is appealing in one sense to value them. Start valuing them based on the value of the bitcoin on their balance sheet.
Immediately though there are strong arguments for mNAV ending up higher or lower than 1. For it to end up lower - if MSTR somehow end up insolvent and being wound up, to ever get there for whatever reason that is, they would have to start having to sell some of the bitcoin they have == less than mNAV 1.
For higher - this is easy - at any point in time that MSTR are a going concern, they are not only the value of their balance sheet bitcoin, perhaps adjusted for debt, but then also their ability to add to this number over time, be that through equity or debt issuance, or by allocating profits from the original business intelligence software business. Consider - they will probably not ever stop trying to acquire bitcoin, as long as they can.
At the moment, clearly the market sees them as a going concern and that mNAV is far higher than 1. The frightening genius of the proposition is that this entire valuation is reflexive - the more the market thinks that MSTR can generate more Bitcoin to add to the balance sheet, the higher the share price, and in actual reality the more MSTR can issue convertible debt and equity that actually do add more Bitcoin to the balance sheet and add to btc per share. This effect goes second order - even the mNAV now is arguably based upon what does the market expect the range of values for mNAV to be in 10 years time.
So back to the beginning - what do MSTR mNAV and Craig Wright have in common? Well, it's said that Satoshi could be anyone, except Craig S Wright, given that he's the only person in the world where a court case has gone to great lengths to prove he's not Satoshi. Similarly, the MSTR mNAV can be any number you care to argue for.. but it can't logically be 1.
#mstr
#microstrategy
#bitcoin
The idea of mNAV (multiple of net asset value) being 1 for MSTR is appealing in one sense to value them. Start valuing them based on the value of the bitcoin on their balance sheet.
Immediately though there are strong arguments for mNAV ending up higher or lower than 1. For it to end up lower - if MSTR somehow end up insolvent and being wound up, to ever get there for whatever reason that is, they would have to start having to sell some of the bitcoin they have == less than mNAV 1.
For higher - this is easy - at any point in time that MSTR are a going concern, they are not only the value of their balance sheet bitcoin, perhaps adjusted for debt, but then also their ability to add to this number over time, be that through equity or debt issuance, or by allocating profits from the original business intelligence software business. Consider - they will probably not ever stop trying to acquire bitcoin, as long as they can.
At the moment, clearly the market sees them as a going concern and that mNAV is far higher than 1. The frightening genius of the proposition is that this entire valuation is reflexive - the more the market thinks that MSTR can generate more Bitcoin to add to the balance sheet, the higher the share price, and in actual reality the more MSTR can issue convertible debt and equity that actually do add more Bitcoin to the balance sheet and add to btc per share. This effect goes second order - even the mNAV now is arguably based upon what does the market expect the range of values for mNAV to be in 10 years time.
So back to the beginning - what do MSTR mNAV and Craig Wright have in common? Well, it's said that Satoshi could be anyone, except Craig S Wright, given that he's the only person in the world where a court case has gone to great lengths to prove he's not Satoshi. Similarly, the MSTR mNAV can be any number you care to argue for.. but it can't logically be 1.
#mstr
#microstrategy
#bitcoin