Saylor vs. Mallers at BTC Prague: the great mNAV mullet — business in the front, convertibles in the back 📊

Michael Saylor and Jack Mallers squared off at BTC Prague on Wednesday over how investors should value Strategy (MSTR) as the company's mix of common equity, preferred stock and convertible debt grows more complex. The exchange reopened a long-running debate about dilution and the right way to calculate the bitcoin treasury's multiple-to-net asset value.

Mallers, CEO of Strike and Twenty One Capital (XXI), asked Saylor how he defines mNAV and whether out-of-the-money securities should be folded into the calculation. Strategy currently has $6.7 billion of convertible debt that is out of the money at the prevailing $115 share price, meaning those securities are not expected to convert into equity under current conditions.

Saylor, Strategy's Executive Chairman, said mNAV can be calculated by including the notional value of convertible debt, common equity and preferred equity, but stressed that mNAV is only one of several valuation frameworks. Investors can also look at gross assets per share and net assets per share, which may exclude preferred equity or convertible debt from the calculation, and the distinction matters less when those instruments represent a small share of the company's overall asset base.

Mallers pushed Saylor on dilution, asking him to name a transaction that would qualify as dilutive if issuing equity for cash is not. Saylor replied that issuing equity for cash or bitcoin is not inherently dilutive because shareholders receive a tangible asset in return, and that raising capital strengthens the balance sheet, widens the capital base and lifts creditworthiness. He pointed to Strategy's recent addition of approximately $100 million to its U.S. dollar reserves, bringing the total to roughly $1 billion, as an example.