Strategy (formerly MicroStrategy) reported earnings this week with founder Michael Saylor focusing on financial abstraction across an hour-long webinar.
Business intelligence firm MicroStrategy (NASDAQ:MSTR) reported earnings this week with founder Michael Saylor focusing on financial abstraction throughout an hour-long webinar.
While he provided some basic metrics about the company’s Q4 performance, he focused mostly on renaming shareholder dilution with terms like “BTC Gain.”
In a daisy chain of financial complexity, MicroStrategy has managed to dilute shareholders by having them focus on abstract financial models that highlight the quantity of bitcoin (BTC) per share rather than the reason for that quantity.
The more time investors spend making calculations and forecasts, the less time they have left to ponder the source of the data itself.
Despite operating a declining enterprise software business that (was worth less than $3 billion prior to the company’s August 2020 pivot to BTC) MicroStrategy’s $85 billion market cap today almost entirely derives from its $46 billion worth of the world’s leading cryptocurrency.
That 84% premium of the company’s market cap above its BTC is real, and investors colloquially refer to it as an “asset premium” or “multiple-to-net asset value” (mNAV). At press time, MicroStrategy’s mNAV is 1.84X.
For a variety of reasons, including the ability of the highly volatile company to sell attractively priced corporate bonds with liquid hedges for short sales, MicroStrategy has traded at a premium to its BTC
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