Saylor and Mallers clash over Strategy's mNAV and dilution at BTC Prague
In brief
- Saylor and Mallers debated Strategy's mNAV calculation and equity dilution at BTC Prague Wednesday.
- Mallers challenged treatment of $6.7 billion out-of-the-money convertible debt in valuation metrics.
- Saylor argued capital raises strengthen balance sheets without inherent shareholder dilution.
The mNAV question
Mallers asked Saylor how he defines multiple-to-net asset value (mNAV), noting that some investors include out-of-the-money securities in calculations. The core tension: Strategy currently holds $6.7 billion of convertible debt that is out of the money at the $115 share price. Whether to include this in mNAV—and how—shapes the multiple investors see.
Saylor responded that mNAV can be calculated by including the notional value of convertible debt, common equity and preferred equity. He also argued that mNAV is only one valuation framework. Investors can also evaluate gross assets per share and net assets per share, he said—giving multiple lenses on the company's true value.
The dilution debate
Mallers challenged Saylor's view on dilution, asking for an example of a dilutive transaction if issuing equity for cash is not considered dilutive. This framing cuts to the heart of the disagreement: does raising capital by selling shares inherently shrink the ownership stake of existing shareholders?
Saylor argued that issuing equity for cash is not inherently dilutive because shareholders receive a tangible asset in return. The balance sheet strengthens. He pointed to Strategy's recent addition of approximately $100 million to its U.S. dollar reserves, bringing the total to roughly $1 billion. Raising capital strengthens the balance sheet, expands the capital base and improves creditworthiness, Saylor said—a net positive for the firm's financial position and its ability to borrow or invest further.
The disagreement reflects a deeper divide in how treasury companies should report their capital structure. Mallers appears to favor a stricter accounting lens that penalizes share issuance; Saylor treats capital raises as strategic moves that benefit the whole enterprise. Neither position is obviously wrong—they're rooted in different assumptions about what "dilution" means and which metrics matter most to investors.
