This article delves into the concepts of MSTR and mNAV, challenging traditional financial indicators, analyzing how Bitcoin-centric companies are reshaping stock values, and revealing why MSTR is pioneering new frontiers for future investments. This article is sourced from a piece authored by On-Chain Mind, and organized, translated, and written by Shaw Golden Finance. (Background: MicroStrategy has issued $6 billion in perpetual preferred stock to raise funds for significant Bitcoin purchases) (Context: MicroStrategy's additional purchase of 155 Bitcoins faced skepticism: floating profits of $30 billion lying flat, waiting for BTC to correct, or simply lacking funds to buy coins?) In the financial realm, there are certain concepts that most of us accept without truly questioning. For instance, the price-to-earnings ratio, the 'fair value' metric, and even the belief that the value of currency itself will remain stable over time. However, when you take a step back, some of these notions begin to appear less like immutable natural laws and more like collective beliefs upheld by tradition. This article deeply explores the concepts of MicroStrategy (MSTR), the market cap to net asset value ratio (mNAV), and how these concepts adapt to the ever-evolving world of Bitcoin-centric companies. It represents a more fundamental and philosophical perspective on examining these new types of companies, linking familiar ideas from traditional finance (TradFi) while questioning many assumptions that investors often take for granted. Ultimately, you'll understand that companies like MSTR are not just 'buying Bitcoin'—they are reshaping the potential landscape of stock value for the next decade. Let's get started. Key Overview Challenge Traditional Indicators: Free Cash Flow per Share (FCF/Share) is the 'North Star' of traditional stock investment, showing close similarities with each share of Bitcoin in companies that hold Bitcoin reserves. The Power of Growth Narrative: Investors bet on long-term growth, despite numerous unknowns, which complements the impressive annual compound growth rate of Bitcoin. mNAV is the 'New Price-to-Earnings Ratio': It's not just a valuation tool; it also indicates operational strength, financing capabilities, and investor confidence in Bitcoin holdings. Technical Signals of MSTR: Indicators such as the 200-day moving average and Z-score probability waves suggest that the current price of approximately $350 for the company presents an attractive entry point. FCF/Share: The North Star of Traditional Investment If we simplify the essence of stock investment, one metric often stands out: Free Cash Flow per Share (FCF/Share). Why? Because free cash flow represents the actual cash a company generates after covering operating expenses and capital investments. Free cash flow per share is often seen as the ultimate measure of a stock's effectiveness in returning capital to shareholders, whether through dividends, buybacks, or reinvestment. A free cash flow per share that grows continuously at 15% annually is often regarded as 'excellent' because compounding at that rate means the stock value approximately doubles every five years—an achievement that very few companies in the world can sustain. This is why the market tends to give such companies premium valuations, typically with price-to-earnings ratios ranging from 25 to 30 times. In some cases, investors even accept price-to-earnings ratios of over 100. At first glance, this seems absurd—many companies won't survive to see their expected return periods. But the reason is simple: growth. If the story is compelling enough, investors will be willing to pay a high price. The Madness of High Price-to-Earnings Ratios Willingness to pay extremely high price-to-earnings ratios is one of the widely accepted quirks in the investment field. Few take a moment to contemplate the reasons behind it. But if you step back, people are essentially betting on an unknowable future. Will this company still exist 25 years from now? Will it still dominate its industry? Will revenue compound growth continue unabated? Despite these uncertainties, the narrative of growth itself becomes a currency. The market reveres it as a standard. The reason is that if many believe in a company's growth, that narrative can drive its stock price up for years to come. This concept is widely accepted in the investment community, but when you break it down simply, engage in a bit of philosophical thought, and consider the true situation, you'll find it's quite mad. The Rise of mNAV Now, apply this logic to Bitcoin treasury reserve companies. Currently, the same concept is playing out in the realm of Bitcoin reserve companies. mNAV (market cap to net asset value ratio) is the 'premium' that investors pay for a company to acquire more Bitcoin in a more efficient manner than they could achieve themselves. I like to compare it to the price-to-earnings ratio of the 'new era.' In reality, it conceptually resembles the price-to-book ratio (price to book value ratio), although this term is less familiar to the average investor. Interestingly, the current price-to-book ratio of the S&P 500 is approximately 5.4 times, with historical volatility ranging from 1.5 to 5.5, remarkably similar to MSTR's historical average mNAV. The price-to-book ratio measures the relationship between a company's market cap and its book value (assets minus liabilities). It indicates how much investors are paying for each dollar of net assets. It's refreshing to see many investors questioning why we should pay a premium for underlying Bitcoin assets rather than blindly accepting this concept like many aspects of traditional finance. We should question why things are priced this way. I believe this is a significant advantage for the average Bitcoin investor: the ability to question widely accepted views simply because 'that's how it's always been done.' Why Does Bitcoin Premium Exist? Trust in Growth Plans—Companies will find ways to grow their asset portfolios faster than individuals. Access to Cheap Capital—This is something average investors can never attain. Operational Leverage—Achieving faster expansion through structures like convertible corporate bonds or equity financing. Can you accumulate more Bitcoin with a loan at approximately 0% interest? It's nearly impossible. This is where the best Bitcoin reserve companies—especially larger and committed ones like MicroStrategy (MSTR)—excel. Specifically, companies like MSTR utilize convertible corporate bonds, where lenders accept lower interest rates in exchange for equity conversion rights. This effectively subsidizes the accumulation of Bitcoin. In traditional finance, this is akin to how tech growth companies use leverage to scale without immediately diluting equity. But if a traditional financial stock's free cash flow annual growth rate of 15% is viewed as 'extraordinary,' then why do we assign a 1.5 times premium (or 4 to 5 times premium) when valuing a Bitcoin-holding company like MSTR, considering Bitcoin's annual compound growth rate over the past 5 to 10 years has reached as high as 60% to 80%? I believe this is a key concept that the broader investment community has yet to grasp; they still generally do not understand that Bitcoin is one of the top five global assets and is gradually consuming global capital value. This is also a significant reason why I have a long-term bullish outlook on companies like MSTR. mNAV Discounts: Traps and Real Signals So, can a company trade below 1 mNAV? Of course. According to Bitcoin Treasuries statistics, among 167 publicly traded companies, there are 21 companies (about ...

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