- MicroStrategy changed its policy, now allowing possible share dilution below previous limits if it benefits the company.
- Founder Michael Saylor announced the update, ending earlier guidance that restricted share issuance below a 2.5x multiple of Net Asset Value (mNAV).
- The revision gives company executives more flexibility to issue new shares to fund operations or purchase more Bitcoin.
- MicroStrategy is valued based on its bitcoin holdings, which currently total about $73 billion in BTC.
- The company’s enterprise value stands at 1.62 times the value of its bitcoin reserves, down from over 3.4 times late last year.
On August 18, MicroStrategy changed its policy on issuing new stock, removing strict limits tied to the firm’s Net Asset Value (mNAV). The company, led by founder Michael Saylor, now states it may dilute existing shareholders by issuing new shares “when otherwise deemed advantageous to the company.”
In a recent post on X, Saylor announced that the company’s previous guidance—stating that new shares would not be issued below 2.5 times mNAV except for interest or dividend payments—no longer applies. The updated approach allows dilution to occur between a 1x and 2.5x mNAV if management believes it benefits MicroStrategy’s strategic goals. The company’s latest statement says, “We believe shareholders benefit from management flexibility in executing our capital markets strategy.”
MicroStrategy holds roughly $73 billion in bitcoin and is widely regarded as the largest public corporate holder of the digital asset. Investors often focus on MicroStrategy’s mNAV—a calculation comparing the company’s stock market value to its bitcoin reserves—rather than traditional profit measures. Currently, the firm’s enterprise value trades at 1.62 times its net bitcoin holdings, a number that has declined by over half since November 2024 when the ratio topped 3.4.
Historically, the company raised funds for bitcoin purchases through non-dilutive methods such as issuing debt and preferred shares. This kept the mNAV above 1 because investors expected management to favor these approaches. Occasionally, MicroStrategy has chosen to sell new stock to buy more bitcoin. When issued above mNAV 1, these sales increase the amount of bitcoin owned for each outstanding share, a tactic executives refer to as “accretive dilution.” However, this process also causes the mNAV figure to decrease, generating concern among some investors about ongoing dilution.
Last month, MicroStrategy introduced guidance designed to ease these worries, confirming it would not dilute shareholders below the 2.5x mNAV threshold except for cash obligations tied to the company’s $8.2 billion in corporate debt and dividends owed to holders of four preferred stock types: STRK, STRF, STRD, and STRC. The company’s change in strategy, shared by Saylor via a company slide presentation and recent statements, now introduces a new and less defined standard, giving management the choice to issue shares whenever they see it as beneficial.
This updated approach reflects reliance on a standard disclaimer from MicroStrategy’s earnings materials, which notes, “Actual results may differ materially from these forward-looking statements.” For more details, see the company’s Q2 2025 earnings presentation and Saylor’s statement on X.
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