Last July, Michael Saylor’s strategy announced formal guidance that the company would not sell MSTR stock for less than 2.5 times its value. $BTC Held excluding interest and dividend payments.
Since then, the company has sold $14.3 billion of MSTR, all at less than 2.5 times its once hallowed mNAV.
The term mNAV was coined by fans of publicly traded companies that have amassed cryptocurrencies; $BTC Even if it’s not, it’s equivalent to NAV.
Saylor’s temporary pledge was published on slide 96 of the company’s financial results on July 31, 2025, and claims that it will “not issue MSTR below 2.5 times mNAV, excluding interest and dividend payments.”
Executives also reiterated this promise verbally at financial results conferences and other events.
Once upon a time, during the leverage frenzy in late 2024 and early 2025, investors actually valued the strategy much more than it was worth. $BTC.
Although the company has fallen below 1x mNAV several times and is currently trading at 1x mNAV. used to be traded 3.2 times its value $BTC —This is a level that will never be achieved.
Strategy’s market capitalization falls below Bitcoin holdings
Michael Thaler’s long-term mNAV instruction lasted several days.
After formalizing its policy of not selling below 2.5x mNAV, the strategy changed its mind a few days later.
On August 18, 2025, the Company announced an “Update to MSTR Equity Guidance” in a subsequent SEC filing.
This update adds a third blanket exception. “If mNAV (as defined on Strategy.com) falls below 2.5x, Strategy will strategically issue MSTR stock to (1) pay interest on debt, (2) fund preferred stock dividends, and (3) otherwise deem advantageous to the Company.”
The new Clause 3 was essentially a longer way of saying always.
The same week it changed its guidance, it resumed dilutive stock sales, selling 875,000 shares for $310 million, per SEC filing, which quickly grew into billions of dollars.
Since Mr. Saylor changed his mind, the sell-off has hardly stopped.
Protos reviewed market disclosures submitted since this change on a weekly basis. In total, at least 92 million new shares were sold for $14.3 billion.
Since then, the strategy’s mNAV ratio has never approached the 2.5x benchmark, and all sales have been below the benchmark.
Relentless shareholder dilution
MSTR currently has 343 million shares outstanding. When Mr. Saylor’s 2.5x pledge expired on July 31, 2025, the number of shares was close to 284 million.
This means that common shareholders have been diluted and investment supply has ballooned by more than 20% in less than 12 months.
To be fair, the price of $BTC Although last year’s results were not particularly strong, Saylor can note that the company survived, coped with a difficult environment and paid all bondholders and dividend obligations on time.
Unfortunately, shareholder dilution has eroded that uptime.
Strategy paid $381 million in preferred dividends in 2025 across the STRK, STRF, STRC, STRD and STRE tickers, while operations consumed $67 million in cash.
Preferred dividends will cost the company an additional $230 million in the first quarter of 2026 alone, now amounting to an annualized $1.763 billion.
MicroStrategy abandons MSTR dilution commitment following mNAV drop
Selling MSTR for less than 1x mNAV may be “advantageous”
There was another promise in the August 2025 guidance slide. That said, if it fell below 1.0x mNAV, the strategy would “consider issuing credits to buy back MSTR.” This has never been done.
Instead, through June 26, 2026, Strategy’s enterprise mNAV on its website ended below 1.0x for the first time.
Strategy’s response was to quickly sell even more shares of MSTR, 12.7 million shares to be exact, for $1.15 billion.
Apparently, the sale of the shares was at a price of slightly less than or slightly more than 1x mNAV and “if otherwise deemed advantageous to the company.”
Three days later, Thaler posted, “We expect Strategies to continue to use MSTR issuance with discipline, especially when stocks are trading at or near 1x mNAV.”
In an attempt to instill confidence, Strategy’s board announced approval for a major share buyback. Although that is true authorized Repurchase, actually never carried out Repurchase pursuant to such authorization.
Since then, weekly filings have repeated the same phrase: “We did not purchase any shares pursuant to our stock repurchase program.”
Finally, the most devastating metric is simply the value lost to common stockholders since Strategy rescinded its guidance of not diluting common stockholders by more than 2.5 times.
As of this writing, MSTR is trading around $99.50, down 35% year-to-date. This is a 75% drop from the closing price of $401.86 on the day when the initial promise of 2.5x mNAV was made.
Strategy has spent and accumulated over $1 billion in 5 years $BTC and huge unrealized losses. Despite significant spending to proactively manage finances, the average cost base is more than $10,000 higher per transaction. $BTC than the current price $BTC.
Unrealized losses on investments now exceed $8 billion.
