Michael Saylor, executive chairman of Strategy, and Strike and Twenty One Capital (XXI) CEO Jack Mallers used the stage at BTC Prague to debate how investors should read Strategy’s bitcoin-related reporting metrics, with the company’s increasingly layered capital structure at the center of the exchange.
Dispute centers on mNAV and out-of-the-money convertibles
Mallers focused first on mNAV, asking Saylor how he defines the metric and whether out-of-the-money securities should be included in the calculation. He pointed out that some investors already do so. Strategy currently has $6.7 billion in convertible debt that is out of the money, meaning those securities are not expected to convert into equity at the current share price of $115.
Saylor said mNAV can be calculated by including the notional value of convertible debt, common equity, and preferred equity. He did not present it as the only valid framework, though. In his view, investors can also look at gross assets per share or net assets per share, and those approaches may leave preferred equity or convertible debt out of the calculation.
Different metrics produce different readings
Saylor argued that the gap between these methods matters less when debt and preferred equity represent only a small share of the company’s total asset base. The discussion highlighted a broader issue: as Strategy relies on more financing instruments, a single metric may not capture the full picture for shareholders trying to evaluate exposure.
Mallers then shifted to dilution. He pressed Saylor for an example of a dilutive transaction if issuing equity for cash should not be treated as dilution. The question tied directly to recent market debate over Strategy’s latest dilutive transaction.
Saylor says equity issued for cash is not automatically dilutive
Saylor’s answer was direct. He said issuing equity for cash is not inherently dilutive because shareholders receive a tangible asset in exchange, whether that asset is cash or bitcoin. He framed capital raising as a way to strengthen the balance sheet, expand the capital base, and improve creditworthiness.
To support that point, Saylor cited Strategy’s recent increase of about $100 million in U.S. dollar reserves, bringing the total to roughly $1 billion. His argument was that when new equity is matched by measurable assets added to the company, the impact should not be reduced to a single dilution label.