Michael Saylor took to X on Friday to address the growing selloff in Strategy’s stock and preferred shares. His message was brief: “Volatility tests every capital structure.” He said the company remains focused on Bitcoin, disciplined capital allocation, and long-term value creation.
That statement landed at a rough moment. Both MSTR shares and STRC — Strategy’s variable-rate perpetual preferred — hit 52-week lows. The stock has now dropped more than 80% from its all-time peak. STRC, which has a $100 par value, traded near $74. When preferred shares slip below par, the engine that funds Bitcoin purchases through new issuance sputters. The company simply can’t raise capital on favorable terms with instruments trading at a discount.
Things got worse when Bitcoin dipped to $58,000 on Wednesday, the first time since October 2024. That pushed Strategy’s paper losses past $14 billion. The company holds 847,363 Bitcoin at an average price of $75,680 per coin — a gap of over $17,000 per coin at current prices.
MSTR had already shed about 25% over five trading days going into Friday. The stock now trades at an mNAV below 1.0, meaning the market values Strategy’s shares at a discount to the Bitcoin on its balance sheet. That’s a problem because the whole model depends on a premium: Strategy issues stock or preferred instruments above NAV, deploys the proceeds into Bitcoin, and lifts NAV per share. Without that premium, both capital taps are constrained simultaneously.
The cash picture is getting uglier too. Annual dividend obligations on Strategy’s preferred instruments — STRC, STRK, STRF, STRD, and STRE — have ballooned from $300 million at the start of 2026 to $1.2 billion. Cash reserves fell 38% this year. Dividend coverage, once above seven years, has compressed to roughly 14 months.
Bloomberg described investor scrutiny of Saylor’s funding model as the most intense the company has faced. CryptoQuant issued a note urging Strategy to halt Bitcoin purchases and rebuild cash to $2.8 billion before resuming accumulation. Strategy did make its first Bitcoin sale in four years in early June, offloading 32 BTC at around $77,135 each. Saylor framed it as proof the company could cover dividends through asset liquidation. The market wasn’t convinced.
Last week, Strategy bought just 520 Bitcoin — a fraction of its prior pace — and put $300 million of a $335.5 million equity raise into cash rather than Bitcoin. Saylor hasn’t elaborated further.
