Premium/NAV Debate

Why do investors pay above Strategy’s net asset value, and why does Strategy’s stock trade at a premium?

Net Asset Value (NAV) is essentially the raw worth of Strategy’s Bitcoin = [(the amount of BTC they own) x (current price of Bitcoin)] + (other assets) – (liabilities). 

There are several reasons why a premium exists: 

• First, investors get leverage. Moves in Strategy are amplified depending on what bitcoin does, and investors pay for this amplification. 
• Second is accessibility. Some funds, like pension funds, mutual funds, 401(k)s are restricted from holding bitcoin because of mandates against crypto. Because Strategy is a regular stock, they can hold it in any brokerage account, making it accessible to investors who face restrictions on holding crypto directly. 
• Third, individual investors cannot execute Strategy’s business model in the same manner as or at a comparable scale to MSTR, and therefore cannot readily duplicate the company’s utility or value proposition. 

Strategy uses the EV/mNAV– enterprise value/ modified net asset value– as its valuation metric. If a company’s EV/mNAV is greater than 1, it’s trading at a premium to its asset value; if a company’s EV/mNAV is less than 1, it’s trading at a discount. As of June 15, 2025, the EV/mNAV is ~1.2. This means that MSTR stock trades at 1.2x the value of its BTC. 

Bulls say that the premium should be higher and is justified. 

Bears, however, say that having a stock premium above NAV is irrational. Their main argument is that, as an investor, when buying at a premium, you are paying more than what you are getting. Additionally, because premiums are susceptible to the market’s attitude and expectations, it’s not sustainable in the long run.

It is BTC’s volatility and immense potential that make Strategy a compelling company to watch.