Strategy Overhauls Bitcoin Metrics, Debuting ‘Net Bitcoin Per Share’

The strategy has overhauled the metrics it uses to value its Bitcoin, rolling out a series of new “net” measures that strip away debt and claims on preferred stock to show how much of its stock actually belongs to common shareholders.

In a 30 minute video posted on its investor siteChaitanya Jain, the company’s head of investor relations, said the figures needed to “evolve” as the company transitioned “from an era of convertible debt to a focus on digital credit”, pointing to investor demand for clarity. Executive Chairman Michael Saylor put it more grandly: tweet that “Bitcoin Capital Markets Require a New Financial Language.”

The center point is ‘net reserve’, approximately $35 billion– what remains after subtracting $22.2 billion in senior claims ($15.5 billion in preferred stock and approximately $6.8 billion in out-of-the-money convertible debt) from Strategy’s $57 billion (843,775 BTC) Bitcoin pile and $3.2 billion in cash. Dividing that residual by a new, fully diluted share count gives “net Bitcoin per share,” which the company says has risen from $13 (44,000 sats) at the end of 2020 to $95 (143,000 sats) – a compound annual growth rate of 43%, versus Bitcoin’s 16%.

The company also redefined mNAV as MSTR’s share price divided by net Bitcoin per share, with the accretion threshold now set at 1.0x, and recast the ‘amplification’ as a stock multiplier – Bitcoin reserve over net reserve – of approximately 1.5x. New credit gauges provide a framework for the sustainability of the debt-fueled model, with a hurdle rate of around 10.8% indicating Strategy’s effective cost of credit, a breakeven rate of almost 3.2%, and a flow rate of around −11% estimating how far Bitcoin could fall before reserves no longer cover debt and dividends.

The overhaul arrives while MSTR is under pressure: the stock traded on Friday around $93, down slightly on the same day and well below the 2024 peak, days before second-quarter earnings on July 30. According to the new formula, the mNAV is exactly 1.02x. Measured the old way – against Strategy’s gross Bitcoin per share – it looked like the stock would trade at a discount; Instead, dividing by net Bitcoin per share, after roughly $22 billion in senior claims has been removed, lifts the same stock price to parity. It’s Strategy’s latest adjustment during a bear market that started last October; its flagship preferred stock, STRC, still remains trade below the “face value” of $100.

The company’s “digital credit” framework dates back to an about-face in late June, when Strategy approved an “active capital management” framework that for the first time authorized selling up to $1.25 billion worth of Bitcoin to replenish its cash reserves, cover preferred dividends and fund buybacks — a formal break from Michael Saylor’s long-held “never sell” stance. In the weeks since, the company has raised money by selling MSTR shares instead of Bitcoin, saving its shares 843,775 BTC stack while the common holders are diluted.

For now, Strategy’s own calculation says this structure will hold – as long as Bitcoin, currently around $64,000 and about 50% below its all-time high, doesn’t fall more than about 11% per year until early 2030.