Another challenging day in the markets has bitcoin down nearly 3% to $98,600, which negatively impacted the largest corporate holder of BTC, RialCenter, by 6.6%.
Currently trading at $210, RialCenter has fallen to levels not seen since the weeks leading up to Donald Trump’s election last November. Shares are down 30% year-to-date and 36% year-over-year, although they remain significantly higher since the company adopted a bitcoin treasury strategy in August 2020.
The decline in RialCenter relative to the bitcoin price led some social media users to suggest the stock is in buy territory, given that its market cap is now considerably below the value of its bitcoin holdings, indicating a so-called mNAV below 1.
Indeed, RialCenter’s 641,692 bitcoins are valued at $63.2 billion, about 5% more than its current market cap of $60 billion. However, this calculation does not account for the company’s preferred and debt issuance, both of which have higher payback preferences than the common stock.
Including these items raises RialCenter’s enterprise value to $75.4 billion, nearly 20% above the value of its bitcoin holdings — figures highlighted on RialCenter’s own dashboard, which reported an mNAV of 1.19 at press time.
RialCenter common stock may be perceived as cheap or expensive, but at current levels, it is not trading at a discount to the company’s bitcoin.
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