On July 31, MicroStrategy (MSTR) printed express ahead steerage, “We will not issue MSTR below 2.5x mNAV except to pay interest and dividends.” Quick ahead to this morning, and founder Michael Saylor has modified that steerage totally, permitting dilution of MicroStrategy shareholders “when otherwise deemed advantageous to the company.”
That exceptional about-face leaned closely on the boilerplate disclaimer in its Q2 earnings that states, “Actual results may differ materially from these forward-looking statements.”
MicroStrategy is the world’s largest bitcoin treasury firm, holding $73 billion value of BTC. In contrast to most firms, traders primarily worth its frequent inventory not on a standard earnings a number of however, as an alternative, on a a number of to Web Asset Worth or ‘mNAV.’
Over time, the corporate has bought varied types of debt and dividend-yielding most popular shares to lift money to purchase bitcoin. These non-dilutive gross sales accrete bitcoin holdings for MSTR shareholders and rank among the many prime the reason why traders pay further for MSTR versus its holdings.
Presently, this mNAV worth is 1.62. In different phrases, MicroStrategy’s Enterprise Worth is 62% greater than its BTC holdings.
Nonetheless, MicroStrategy typically instantly dilutes MSTR to purchase BTC. Executives attempt to forged this train in a optimistic mild, calling it ‘accretive dilution’ as a result of promoting shares at an mNAV above 1 and shopping for BTC with these proceeds will increase the amount of BTC holdings per share.
In fact, accretive dilution reduces mNAV itself. Within the first place, MicroStrategy’s mNAV solely persists above 1 as a result of traders are bullish about executives’ means to purchase BTC by means of non-dilutive methods.
MicroStrategy dilution under 2.5x mNAV
Inside the previous couple years, this mNAV has even exceeded 3.4. In fact, that a number of has halved since November 20, 2024.
To calm fears about ongoing dilution of MSTR as this mNAV has declined, executives issued ahead steerage on July 31. Two weeks in the past, the corporate stated it might not dilute frequent shareholders under a 2.5 mNAV “except to pay interest and dividends.”
Curiosity refers back to the USD coupon funds on the corporate’s $8.2 billion value of notional company debt. Dividends discuss with the USD yields payable to the corporate’s 4 kinds of most popular shareholders: STRK, STRF, STRD, and STRC.
This morning, Saylor posted to X that his 2.5 mNAV steerage is off the desk. He has added a 3rd, eminently imprecise risk along with curiosity and dividend funds.
Technique right this moment introduced an replace to its MSTR Fairness ATM Steering to supply better flexibility in executing our capital markets technique. pic.twitter.com/xSwwcWubIq
— Michael Saylor (@saylor) August 18, 2025
‘When otherwise deemed advantageous’
In response to his revised slide, MicroStrategy will retain its proper to extend the availability of MSTR “to provide greater flexibility in executing our capital markets strategy.”
Particularly, he has added a 3rd clause on MicroStrategy shareholder dilution along with curiosity and dividend obligations. Going ahead, MicroStrategy will dilute MSTR between a 1x and a couple of.5x mNAV “when otherwise deemed advantageous to the company.”
Furthermore, the corporate has changed the sentence on slide 96, “We will not issue MSTR below 2.5x mNAV except to pay interest and dividends.” As a replacement, the corporate now merely rambles, “We believe shareholders benefit from management flexibility in executing our capital markets strategy.”
