Michael Saylor responded to the deeper selloff in Strategy’s stock and preferred stock on Friday with a statement on X.
“Volatility tests any capital structure,” Saylor wrote. “The strategy remains focused on Bitcoin, disciplined capital allocation, credit quality and long-term value creation. We value our investors and will continue to execute with transparency and determination. $MSTR”.
The tweet landed as MSTR shares and STRC, the strategy’s perennial favorite preferred rate, both hit 52-week lows. MSTR has shed more than 80% from its all-time high. STRC, which has a face value of $100, is trading near $74 – a 26% discount. When preferred stock trades below par, the mechanism that finances bitcoin purchases through preferred issuance breaks down: the company cannot raise capital on favorable terms on instruments that trade at a discount.
Bitcoin broke above $58,000 on Wednesday for the first time since October 2024, pushing Strategy’s paper losses to over $14 billion. The company has 847,363 bitcoin at an average purchase price of $75,680 per coin – a gap of more than $17,000 per coin in current prices.
MSTR shares, which had fallen about 25% over five trading days through Friday, extended that decline somewhat in premarket trading as bitcoin’s decline appeared to stagnate. The stock is trading at an mNAV below 1.0, meaning the market is valuing Strategy’s shares at a discount to bitcoin on its balance sheet.
This matters because the company’s model depends on a premium: Strategy issues shares or preferred instruments above NAV, deploys the proceeds in bitcoin, and raises the NAV per share in the process. When the premium is gone, both capital taps are restricted at the same time.
The strategy’s cash burden worsens further
The pressure on the capital structure extends beyond bitcoin’s price. Annual dividend commitments on the Strategy’s preferred instruments – STRC, STRK, STRF, STRD and STRE – have increased from $300 million at the start of 2026 to $1.2 billion, a fourfold increase in six months. The cash balance has fallen by 38% this year. Dividend coverage, once over seven years, is compressed to about 14 months.
A Bloomberg report on Thursday described investor scrutiny of Saylor’s financing model as the most intense the company has faced. CryptoQuant issued a note this week urging Strategy to stop bitcoin purchases and rebuild cash to $2.8 billion before resuming accumulation.
Strategy made its first bitcoin sale in four years in early June, offloading 32 BTC at an average of $77,135 per coin. Saylor framed the move as evidence that the company could cover dividend obligations through liquidation of assets. The market reaction suggests that framing did not last.
Last week, Strategy bought 520 bitcoin — a fraction of its previous pace — and put $300 million of a $335.5 million equity raise in cash instead of bitcoin. Saylor did not elaborate on the tweet beyond the statement sent to X.