Strategy creates and updates 10+ new metrics after its older metrics no longer meet its goals and narratives

This analysis is based on Strategy's "New & Updated Metrics" presentation released on July 23, 2026. I've also deciphered a lot of the background financial terminology that was left out of the slides.

TL;DR: MicroStrategy keeps changing its metrics to fit new narratives:

In summary, a lot of MicroStrategy/Strategy's misleading older metrics for mNAV and BPS were no longer looking positive after diluting/selling MSTR to increase cash reserves or execute STRC buybacks. So they've needed to invent new terminology to help bridge that gap and account for increasing cash reserves.

While I believe the new metrics are more accurate (and more similar to CEBE metrics), I do not appreciate how Microstrategy has historically ignored widespread criticism over their older misleading metrics when those old metrics were benefitting their marketing by painting their performance as more positive than they actually were. Only now are they acknowleding the criticism over metrics when it benefits them.

This isn't the first time MicroStrategy has updated its metrics. Similar to how the rainbow chart evolves every time it loses its narrative, MicroStrategy's mNAV has evolved from Basic mNAV to Diluted mNAV to Enterprise mNAV to the "new" mNAV and new Net BPS.

What's the difference between In-The-Money and Out-of-The-Money?

Microstrategy's puttable debt can be ITM (converts to shares) or OTM (redeems for cash). Puttable means that the debt holders have the choice of redeeming for cash OR converting to shares.

• In the Money (ITM): Converts to shares. The current market price of the common stock is higher than the preset conversion price. Converting the security into common shares is worth more than holding it as a fixed-income asset.
• Out of the Money (OTM): Redeems for cash. The current market price of the common stock is lower than the profitable conversion price
• All convertibles and STRK are currently OTM because MSTR price is too low ($97) for them to convert profitably ($150-$1000). This is really bad for MicroStrategy because those convertibles can be redeemed at their high conversion values for cash on their 2027-2029 put dates.

New Net Metrics

The old metrics were replaced by ones that include the USDC reserve but subtract debt.

Created because the plain BPS metric was no longer increasing when selling MSTR to increase the reserves (i.e. diluting MSTR shares).

• Reserve ($): BTC Reserve + USD Reserve
• Fully Diluted Shares Outstanding (FDSO): Basic shares + Options + RSUs/PSUs + In-The-Money Debt & Pref
• Assumed Diluted Shares Outstanding (ADSO): Basic shares + Options + RSUs/PSUs + All Debt & Pref
• Net Reserve ($): BTC Reserve + USD Reserves - (OTM Debt and Prefs)
• Net BTC (₿): BTC + Net Reserves / Bitcoin Price
• Net BTC Per Share (Sats): Net BTC (₿) in sats / Fully Diluted Shares Outstanding
• Net BTC Per Share ($): Net BPS (sats) × Bitcoin Price

Net BPS (in Sats and $) are the 2 big ones they're now using for their KPIs (Key Performance Indicators)

Strategy expects a ~50% performance increase (i.e. Amplification) by using Net BPS instead of plain BPS as a metric. I honestly don't know why the Amplification metric exists other than to make numbers look good.

Updated Metrics

• mNAV: MSTR price / Net BPS = MSTR FSDO market cap / Net Reserves
• Amplification: BTC Reserve / Net Reserve

The older Enterprise mNAV was calculated as: Enterprise Value / BTC Reserve

This new mNAV is a pain to calculate since it keeps changing depending on whether the convertible debt is ITM or OTM. This mNAV rises faster than Enterprise mNAV the higher it gets from 1.0. (e.g. Currently, Ent mNAV is 1.02 while new mNAV is 1.05.)

mNAV still acts fine as a craziness index. mNAV under 1 means that everything is backed and that investors are sane. mNAV over 2-3 means that investors are getting overly-bullish.

Other new metrics:

• Duration (Yrs): Reserve / Annual Interest and Dividend Obligations, expressed in years
• BTC Hurdle ARR: Represents Strategy’s effective cost of credit (for dividends and debt), above which MSTR captures a positive spread.
• BTC Floor ARR: 1.0x: Represents the lowest constant BTC ARR over the weighted-average duration of the credit structure that maintains 1.0x coverage of our Net Debt and Pref through our BTC Reserve, after funding interest expense and preferred dividends over the period

This is important because below the BTC Floor ARR of 1.0x, Strategy may need to consider restructuring its credit. These new metrics complement their existing metric for "BTC Breakeven ARR", which is currently 3.24%.

TL;DR: Microstrategy has finally deprecated its old misleading metrics after they shed light on bad performance numbers. Created new metrics (that better account for reserves and debt) to help numbers look better.

I'll be back next year when newer metrics are invented again.