At the Bitcoin conference in Las Vegas, Michael Saylor, Executive Chairman of MicroStrategy, shared his strategic insights regarding the company’s response if its multiple to net asset value (mNAV) dips below 1, similar to what happened during the previous bear market.

Saylor elaborated on the firm’s operational flexibility, asserting that if mNAV fell, they would sell preferred equity (STRK and STRF) and reinvest those proceeds into repurchasing common shares to stabilize confidence in their stock value.

“GBTC is a closed-end trust… a corporate entity that has no operational flexibility to manage its capital structure.”
Translation: GBTC is a type of financial structure that cannot adapt its capital management.

He pointed out that unlike GBTC, MicroStrategy is a functioning business capable of leveraging assets and making strategic capital decisions. Saylor emphasized that a company losing its mNAV below 1 reflects diminished shareholder confidence.

He also explained that if their stock price fell drastically, the strategic maneuver would be to decrease preferred stock or fixed income instruments, thereby improving the company’s capital structure.

Saylor remarked,

“To create value, you need to create option value to generate as much optionality as possible. The more options, the greater the value.”
Translation: More available options lead to increased potential for value creation.

In his concluding statement, he affirmed,

“The thing that makes our company a monster is having multiple at-the-market offerings (ATMs) in multiple capital markets.”
Translation: The strength of our company lies in our access to various liquidity sources.