Bitcoin Premium in Treasury Companies and Stock Values

There is a difference between the stocks of companies holding Bitcoin and directly purchasing Bitcoin. Investors use the mNAV indicator to measure this difference. mNAV is calculated by dividing the market value of the company by the market value of the Bitcoin it holds. A 1.0x mNAV indicates that the company offers a valuation consistent with its Bitcoin assets, while a 1.5x means investors value the company at $1.5 for every $1 of Bitcoin, and a 0.8x indicates a discounted pricing. However, methods of calculating mNAV can vary. If a treasury company's net asset value is trading above its mNAV, it indicates that investors are valuing it beyond its current Bitcoin balance. This situation allows the company to raise capital by issuing new shares and use it for additional Bitcoin purchases. Strategy is an example that finances Bitcoin purchases through share issuance and holds 845,050 BTC as of September 7. Strategy's mNAV ratio is approximately 1.14x. A drop below 1.0x in the mNAV ratio does not necessarily mean the stock is cheap; the market also considers factors such as debt burden and management quality. Metaplanet is trading at 0.97x mNAV. The loss of premiums seen in treasury stocks can lead to losses for investors.

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