What Happens When mNAV Falls From 2.0× to 1.0×?

Input	Fixed premium-compression case
Starting multiple	2.0 times gross Bitcoin market value
Ending multiple	1.0 times gross Bitcoin market value
Numerator	Common-equity market capitalization
Fixed quantities	Bitcoin holdings and common shares
Base Bitcoin price change	Zero; separate sensitivities are explicitly hypothetical
Excluded	Share issuance, financing changes and BTC Yield

Calculated from the fixed inputs above, with Bitcoin price, holdings and share count held constant and no new shares issued.

Measure	Result
Gross multiple ratio (ending ÷ starting)	0.50×
Share price ratio (ending ÷ starting)	0.50×
Share price return	-50.0%

Define gross multiple m = E / (Q × P), where E is common-equity market value, Q is Bitcoin held, and P is Bitcoin price. With common shares S fixed, share price is m × Q × P / S. A lower multiple reduces the equity value attributed to the same Bitcoin position.

Under the stated fixed quantities, the ending share-price ratio is (m_end / m_start) × (P_end / P_start). With unchanged Bitcoin price, that becomes 1/2. This result does not use a live company quote or claim that any named company's premium will change in this way.

For a separate hypothetical sensitivity, if Bitcoin also loses 20% while the multiple falls from two to one, the share-price ratio is 0.80 × 0.50 = 0.40. The modeled share-price decline is 60%, not the sum of 20% and 50%.

The distinction matters because the two effects multiply. A historical stock decline can reflect additional changes in holdings, financing, business value, or expectations that this simple scenario holds constant. The equation isolates a mechanism rather than reconstructing a company's actual experience.

The mNAV Premium Stress Test also shows a separate issuance illustration, which changes shares and Bitcoin holdings. That illustration is reported separately and does not enter this constant-share result; the share-price change above comes only from the multiple moving from 2.0× to 1.0×.

Bitcoin per-share growth and BTC Yield are also distinct from share-price return. Strategy's annual-report definitions explain those distinctions for its company-defined KPI. This scenario does not use or estimate BTC Yield.

The conditional ratio excludes transaction costs, tax, distributions, and financing. It is dimensionless and needs no current market quote. Absolute share prices would require additional dated inputs and cannot be derived from the two multiples alone.

Other mNAV definitions differ: a multiple based on enterprise value or net assets is a different formula. Its behavior under a price change depends on the included liabilities and assets. The familiar two-to-one example is therefore attached to its gross-equity definition throughout.

Real companies issue securities, hold cash, operate businesses, and face senior obligations. Investor demand can change for reasons unrelated to Bitcoin. The scenario does not predict a stock price, certify a fair multiple, or establish that a premium-funded strategy benefits common shareholders.

Separate Bitcoin exposure from the price paid for that exposure. Premium compression can reduce common-equity value even when the underlying Bitcoin position is unchanged, but only a clearly defined multiple makes the arithmetic interpretable.