MicroStrategy wannabes and the return of mNAV mania
mNAV speculation in public markets is back. Coined as a colloquial oversimplification in crypto lingo, mNAV means multiple-to-net asset value or the ratio of market capitalization to the crypto assets held by a public company.
However, as with most parlance from the nascent crypto sector, the acronym is a misnomer. Unlike trusts, public companies do not have “net assets,” a controlled term, nor is there any right of common shareholders to redeem shares for any assets.
Even MicroStrategy, the largest company trading at a positive mNAV, explicitly tells its shareholders that its stock (MSTR) doesn’t confer any ownership interest in the bitcoin (BTC) the company holds.
Nevertheless, as of publication time, there are at least half a dozen public companies on US stock exchanges trading at a positive mNAV.
Investing exuberance for MicroStrategy peaked on November 20, 2024, when investors paid more than a 3.4 mNAV. Nowadays, its mNAV ratio has declined to 2.
Still quite impressive, an mNAV of 2 means that investors are paying double as much for MSTR as they could otherwise pay to simply acquire BTC outright. MSTR investors overpay because they believe Michael Saylor will find ways to expand that multiple or accrete BTC on a fully diluted basis into the future.
Other companies are trading at far more generous multiples.
Read more: Strategy trades at nine-month low multiple to its bitcoin holdings
Overpaying for crypto: Beyond MicroStrategy
Cantor Equity Partners (CEP), Jack Mallers’ newly-formed company controlled by Tether and Bitfinex, closed Wednesday’s trading session with a market cap of $433 million on the aspiration of obtaining 2.7% of 42,000 BTC, worth about $107 million.
That places CEP’s mNAV at an impressive 4.
Upexi (UPXI) recently closed a $100 million private placement that it intends to use to purchase solana (SOL).
Under the assumption that it will acquire $100 million worth of SOL in short order, it closed Wednesday’s trading session at a $407 million market cap or mNAV of 4.
SOL Strategies (CYFRF) secured a $500 million convertible note facility to acquire SOL.
It has only tapped some of that facility, however, and last disclosed 267,151 SOL on its balance sheet that would be worth about $40 million today if that token count hasn’t increased.
That imputes an mNAV of 8.2 at its closing market cap of $330 million.
Elsewhere, DeFi Development Corporation (JNVR) raised $42 million to buy SOL. It closed at a $109 million market cap for an mNAV of 2.6.
Meanwhile, Metaplanet (MTPLF) holds 5,000 BTC worth $474 million yet closed for trading Wednesday at a $1.3 billion market cap, placing its mNAV at 2.7.
Finally, the $392 million Boyaa Interactive (BOYAF) holds $317 million worth of BTC, meaning its mNAV is 1.2.
As the examples above illustrate, mNAV is a simplistic valuation that ignores debt, business obligations, and a host of other factors that should influence a reasonable investment decision.
Nevertheless, with so many ratios above 1, it’s clear that a round of mNAV mania is once again infecting crypto traders.
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