mNAV and BTC Yield Methodology

Measure	Definition used here	What it excludes
Gross equity multiple	Common-equity market value divided by gross Bitcoin value	Debt, preferred claims, cash, and operating assets
Bitcoin per share	BTC holdings divided by the stated share denominator	Senior claims and stock price
BTC Yield	Percentage change in consistently defined Bitcoin per share	Cash distributions and total shareholder return
Premium scenario	Joint change in Bitcoin price and the gross equity multiple	Financing or share changes unless separately modeled

Q is Bitcoin holdings, P is currency per BTC, S is the selected common share count, and p is currency per common share. Valuation inputs need matched dates and currencies. The share denominator used for a quoted equity market capitalization can differ from an issuer's assumed diluted denominator for a per-share KPI.

Strategy's 2025 annual report describes BTC Yield as a change in Bitcoin per assumed diluted share and explains why it is not shareholder return or income. Cross-company comparison requires reviewing each issuer's definition rather than relying on identical metric names.

Under the gross equity convention:

• E = p × S
• B = Q × P
• m_gross = E / B
• Bitcoin per share b = Q / S_diluted
• BTC Yield = (b_end / b_start) - 1

The multiple is undefined when B is zero. BTC Yield is undefined when opening per-share holdings are zero. A net common-asset denominator, such as Bitcoin plus cash and other assets minus debt and senior claims, is a different measure. Nonpositive net asset value makes an ordinary premium interpretation unsuitable. The mNAV Premium Stress Test tool on this site only calculates the gross multiple: it has one combined debt field used solely for a separate solvency check, and no fields for preferred stock, cash, or other assets.

Holding Q and S fixed in the gross model, p_1 / p_0 = (P_1 / P_0) × (m_1 / m_0). A convertible cannot simultaneously be treated as fully converted equity and outstanding debt in the same economic case without explaining the apparent double count.

In a hypothetical gross-multiple scenario, Bitcoin price, holdings, and common shares stay fixed while the multiple falls from 2.0 to 1.0. Common share price halves. If Bitcoin also falls 20%, the share-price ratio becomes 0.8 × 0.5 = 0.4, a 60% decline. No operating business or senior claims are represented in this simplified example.

Separately, per-share holdings increasing from 0.0010 to 0.0012 BTC produce BTC Yield of 20%. The shareholder could still lose money if the stock price falls. The mNAV Premium Stress Test tool on this site includes a separate BTC Yield panel: you enter two dated observations of holdings and diluted shares, and it returns this ratio, or no figure when opening holdings per share are zero. Its flywheel section remains a single hypothetical issuance scenario using today's inputs.

For a pure common-share issuance with all net proceeds spent on Bitcoin, let n be new shares, k their issue price, and c total issuance costs. Then Q_new = Q + (n × k - c) / P and S_new = S + n. Gross BTC per share increases only when k - c/n > Q × P / S for n > 0.

The familiar above-one-multiple rule therefore assumes this gross definition, compatible share counts, no other use of proceeds, and sufficient net issue price after costs. It does not prove accretion to net common value. Borrowing or preferred issuance can raise gross Bitcoin per common share while adding senior obligations. The tool's own flywheel section always models a fixed 10% share issuance at today's price with no fees or costs; it does not let you change the issuance size, issue price, or costs, so it cannot reproduce this general formula directly.

Absent diluted shares cannot be silently replaced with basic shares. A fresh stock quote does not update an old holdings filing. Stock splits, conversions, and currency changes require comparable opening and closing denominators. Holdings, market quotes, and financing disclosures each retain their own effective date.

The premium example excludes fees and taxes. The issuance equation includes an explicit cost amount but no tax consequences or operating expenditures. Market capitalization is a market measure rather than proceeds necessarily available from issuing the entire share base at the quoted price.

A gross multiple omits the business and capital structure. Company-defined dilution can differ from accounting diluted EPS shares. BTC Yield can improve while risk rises or common-share returns deteriorate. A simple two-variable premium stress test cannot reproduce refinancing, mandatory payments, or investor responses to new issuance.

Write down the numerator, denominator, and share convention before interpreting the label. Gross exposure growth, net economic value, and the return earned by a shareholder are separate results.