A surge of new bitcoin treasury companies—businesses dedicated exclusively to acquiring bitcoin—is overwhelming the market.
As they largely adopt Strategy’s (MSTR) approach, discussions are emerging about how to best appraise their value and compare them.
“The key metric for a bitcoin treasury is the premium at which it trades relative to its underlying net assets, including any operating company,” wrote Greg Cipolaro, global head of research at bitcoin financial firm NYDIG, in a June 6 report.
This involves summing the company’s bitcoin, cash, and enterprise value (excluding bitcoin assets), then deducting liabilities like debt and preferred stock. “This premium enables these companies to exchange stock for bitcoins, effectively functioning as a currency exchange,” Cipolaro explained.
A commonly used metric, mNAV, assesses a company’s valuation against its net asset value—specifically, its bitcoin holdings. An mNAV above 1.0 indicates that investors are willing to pay a premium for the stock compared to its bitcoin assets; however, an mNAV below 1.0 suggests that the equity is worth less than the company’s holdings.
Nonetheless, Cipolaro noted that mNAV alone is “insufficient” for evaluating these firms’ strengths and weaknesses. The research report employed various metrics, including NAV, mNAV via market capitalization, mNAV by enterprise value, and equity premium to NAV, to create a more nuanced picture.
The data reveals that Semler Scientific (SMLR) and Trump Media (DJT) exhibit the lowest equity premiums to NAV among the eight companies analyzed, at -10% and -16%, respectively, despite both having an mNAV above 1.1.
Currently, both SMLR and DJT remain relatively unchanged on Monday, even as bitcoin rises to $108,500 from Friday’s $105,000 level. MSTR has increased by nearly 5%.
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