MSTR underperforms, decouples from BTC to the downside

The premium that investors are willing to pay for common shares of Michael Saylor’s MicroStrategy has fallen to a 17-month low.

Trackers of the multiple-to-Net Asset Value or “mNAV” show MSTR trading at a basic NAV premium of just 1.4 which is its lowest since February 2024.

Even MicroStrategy’s self-reported mNAV, which uses a more generous enterprise value instead of its basic market capitalization for calculating the ratio between MSTR and the company’s $74 billion worth of bitcoin (BTC), is just 1.61 as of publication time.

Even a graph of MSTR’s diluted share mNAV, 1.57, shows its worst level since February 2024.

MicroStrategy is the world’s largest BTC treasury company. Its founder claims that MSTR should trade at a premium to its BTC holdings “due to credit amplification, an options advantage, passive flows, and superior institutional access.”

That premium has been eroding since November 2024 and is at its lowest level since the prior February.

Worse, critics have pointed out a concerning decoupling of Saylor’s MSTR compared to the otherwise strong performance of BTC.

Although the company is a leveraged play on the price of BTC, MSTR has managed to underperform BTC dramatically in recent months.

MSTR is starting to underperform BTC

Over the last six months, BTC has rallied 20.5%. MicroStrategy common stock, in contrast, has rallied a mere 9.3%.

That underperformance is as notable as it is unusual. MicroStrategy investors are accustomed to outperforming BTC over time. 

Indeed, MSTR has rallied 183% over the past 12 months — double the growth of BTC’s 98%. Strategy has trounced BTC over longer time frames as well, growing 2,417% over the past five years amid BTC’s 893% rally.