Strategy Inc. CEO Phong Le announced a sweeping redesign of the company’s key financial metric, the modified net asset value (mNAV), while also establishing a $1.4 billion cash reserve to cover dividend and interest obligations. The move comes as the firm’s stock has underperformed Bitcoin this year, with MSTR shares falling 39.45% year-to-date compared to a 26.43% decline in the cryptocurrency.
The revamped mNAV framework addresses several criticisms of the old model: it accounts for all securities senior to MSTR, distinguishes between in-the-money and out-of-the-money convertible notes, and sets a fixed 1.0x efficiency threshold for future share issuance. Above this level, any equity offering must be accretive to Bitcoin per share (BPS), currently reported at 0.0023 BTC. With the current mNAV at 1.07x, management believes the simplified rule gives investors a clearer benchmark.
Alongside the metric overhaul, Strategy updated its annual guidance. The company now projects results ranging from a net loss of $5.5 billion to a profit of $6.3 billion, a drastic revision from an earlier $24 billion profit estimate. This reflects fair value accounting adjustments on its massive Bitcoin treasury of over 700,000 BTC. To avoid selling Bitcoin in a downturn, the firm established the $1.4 billion reserve fund, which should cover the roughly $800 million in annual interest and dividend payments, including the 11.25% variable dividend on the STRC digital credit instrument.
The stock’s underperformance was highlighted when MSTR dropped over 10% after Bitcoin fell below $85,000. Preferred securities STRD and STRK also declined, but by smaller margins—21.74% and 24.04% respectively. In a further capital‑allocation move, Strategy allocated $25 million to repurchase STRC preferred shares at $86.52 each, below the $100 par value.
The effectiveness of the new financial structure will be closely watched when the company files its next quarterly report with the Securities and Exchange Commission.
