David Bailey’s Nakamoto exceeded 23X mNAV, 11X higher than MSTR
Bitcoin Magazine’s David Bailey is hoping to merge some of his companies into publicly-traded Kindly, and the valuation investors placed on the merger put Michael Saylor to shame.
Thanks in part to Saylor himself amplifying Bailey’s news with its difficult-to-calculate metrics, Bailey’s company briefly rallied to a multiple-to-Net Asset Value (mNAV) over 11X greater than Saylor’s company.
The imputed value of Bailey’s fully converted entity, which will eventually be called Nakamoto, briefly exceeded a 20X mNAV this morning. This colloquial and imprecise valuation metric is popular among bitcoin (BTC)-focused equity investors.
Popularized by the X-based community of MicroStrategy investors, Irresponsibly Long MSTR, mNAV is a rough approximation of how much higher the market capitalization of a public company is relative to its BTC holdings.
Anything above 1 means that the company is worth more than the BTC it owns.
Today’s mNAV for MicroStrategy is 1.9X. This summarizes the mathematics of multiplying MicroStrategy’s $57 billion worth of BTC holdings by 1.9 to produce MSTR’s $111 billion market cap.
MicroStrategy’s highest mNAV in the past year was about 4.2X on November 20, 2024. Kindly, for comparison, traded at an mNAV exceeding 23X today.
Read more: Why have MicroStrategy insiders been dumping MSTR?
Nakamoto mNAV exceeds MicroStrategy by 5X
According to its latest investor presentation filed with the Securities and Exchange Commission (SEC), a future expectation (pro forma) ownership estimate on a fully converted basis would give Kindly shareholders today 1.1% ownership of the merged company.
At its high at today’s stock market open, Kindly’s market cap was over $187 million.
Mathematically, that imputed a pro forma fully converted value of $17 billion for the future combined entity.
However, the gross proceeds of the capital raise announced today pursuant to the merger were only $710 million. Kindly also had $2.5 million in total assets as of March 31.
Even assuming the company will use 100% of those gross proceeds to buy BTC, its mNAV exceeded 23X on its 9:30am market cap today.
Obviously, it didn’t take long for investors to back down on that valuation. As of publication time, the share price of Kindly has halved since its opening high.
Still, at Kindly’s $95 million market cap as of publication time imputing an $8.6 billion valuation on post-merger Nakamoto, it’s still trading at an mNAV exceeding 10X assuming the company will own $712.5 million BTC.
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