Last week, Strategy (formerly MicroStrategy) executives were tapping the company’s at-the-market (ATM) to sell MSTR and dilute shareholders ahead of its highly anticipated and ultimately disappointing S&P 500 decision. On Friday — after the company had sold over $200 million worth of MSTR in a week — S&P Dow Jones Indices’ US Index Committee declined to add Strategy to its prestigious S&P 500 Index. Despite satisfying over a half dozen qualifying metrics, the committee decided to award inclusion to Robinhood, AppLovin, and Emcor, instead. Then this morning, Strategy Chairman Michael Saylor went on to brag about how his company’s sales ahead of that S&P 500 declination allowed the company to buy more bitcoin (BTC). With that $200 million from MSTR dilution plus $16.8 million from preferred shares, the company acquired 1,955 additional BTC last week. Selling MSTR to achieve BTC yield As usual, Saylor boasted about the company’s so-called BTC Yield, the gain in Strategy’s BTC holdings relative to its assumed diluted shares outstanding. Even though investors bidding more for MSTR than its BTC holdings fund the overwhelming majority of this “yield,” Saylor usually excludes that explanation when boasting about impressive-sounding BTC yield figures like today’s 25.8% year to date achievement. The company even has a BTC yield target of 30% for the year. Of course, it overwhelmingly achieves these targets by selling down investors’ bullish multiple-to-net asset value (mNAV) on MSTR shares. Although the company has sold some debt and preferred shares in a non-dilutive manner, direct MSTR dilution via ATM offerings has funded the vast majority of its capital raises. Read more: Michael Saylor diluted MSTR by $735.2 million after saying he wouldn’t As recently as November 2024, investors bid over 3.4x for MSTR shares versus Strategy’s BTC holdings. Today, that same basic mNAV has declined to 1.31x. As that multiplier declined over the months, Strategy popularized a variant of basic mNAV to boost the multiplier into a larger number. It now prefers enterprise value mNAV, which includes not only MSTR but also the company’s bonds and preferred stocks, to reach 1.53x.