The MSTR stock price has collapsed this year, moving from the year-to-date high of $456 to $208 today. That crash has led to a $60 billion wipeout, with its market capitalization moving from over $128 billion to $60 billion today.
Strategy mNAV crashes below 1
Strategy stock price continued its strong downward trend this month and is now hovering at its lowest level since October last year. It has plunged by 61% from its all-time high, even as the S&P 500 and Nasdaq 100 indices have jumped to their all-time highs.
Most importantly, the company’s premium that has always existed, has now evaporated. The market NAV multiple has also plunged below 1 as its Bitcoin holdings have become more valuable than its market capitalization.
In this, its Bitcoin market capitalization stands at $62 billion, while its market capitalization is at $60 billion. If the crash continues, it means that the mNAV based on the enterprise value, will also move from the current 1.194 to below 1.
Strategy, which pioneered the Bitcoin accumulation strategy, joins many other companies that are now trading below their NAV multiples.
For example, Metaplanet’s NAV has dropped to 0.917, while Vivek Ramaswamy’s multiple moved to 0.985. Other companies like GD Culture, KindlyMD, and Semler Scientific have seen their premiums dive.
The crashing NAV multiple is important for Bitcoin treasury companies because it is what has endeared them as they became more valuable than Bitcoin and ETFs.
Most importantly, it helped them to raise money easily, a situation that may worsen now that the NAV premium has plunged. Indeed, Strategy has made some key actions to raise money recently. It has raised $715 million by issuing 3.5 million euro-preferred shares.
The company also plans to raise money backed by its Bitcoin holdings. This is a good approach for the company if Bitcoin price bounces back from the current slump.
Meanwhile, more investors are continuing to short the company as they expect the shares to keep falling. The short interest has now jumped from the year-to-date low of 7% to 10%.
MSTR stock price technical analysis suggests more downside to go
Strategy stock price chart | Source: TradingView
Technicals suggest that the MSTR stock price has more downside to go in the near term. One of these technicals is that the stock has just crashed below the important support level at $243, its lowest level in April this year.
This was an important level as it was the lower side of the inverse cup-and-handle pattern, a popular continuation sign in technical analysis.
Measuring the distance from the cup’s upper side and the lower side, then measuring the same one from the cup’s lower side points to more downside, potentially to $120. This price is also notable as it coincided with the lowest level in May, July, and September last year.
On top of this, the stock has formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) have crossed each other. This pattern normally leads to more downside.
Therefore, the most likely scenario is where the Strategy stock price crash continues as sentiment in the company worsens and as the Bitcoin price crash accelerates.
The only way that the MSTR stock rebounds is for Bitcoin price to rebound, and possibly move above the psychological level at $110,000
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