The strategy’s increased preferred stock liabilities and reliance on bitcoin-backed financing have increased risk to common shareholders, while the company’s shares continue to trade about 31% above their estimated net asset value, according to a Fortune analysis.
summary
- Strategy stock is trading at 31% above its estimated net asset value despite rising debt and preferred stock liabilities, Fortune said.
- The analysis warned that Bitcoin’s decline could have an amplifying effect on common shareholders because liabilities have risen to about $21.8 billion.
- Questions about dividend funding persisted even after the strategy increased its cash reserves to $1 billion and resumed purchasing of Bitcoin.
luck to caution Discerning investors who continue to allocate to the strategy may come under pressure if Bitcoin declines further or if concerns about the company’s capital structure intensify.
Based on the publication’s estimates, the strategy holds 844,000 bitcoins worth approximately $51.1 billion at a bitcoin price of $60,500. Fortune magazine also valued the company’s software business at about $1.5 billion, and noted that the strategy has nearly $1 billion in cash, putting the estimated value of its assets at about $53.6 billion.
After accounting for approximately $6.2 billion in convertible debt and $15.5 billion in preferred stock obligations, Fortune calculated that common shareholders would be left with about $31.8 billion. Despite this number, the company’s market cap was approximately $41.6 billion on June 5, representing a premium of about 31% over the publication’s estimated net asset value.
Preferred stock financing raises new questions
Central to Fortune’s concerns is the strategy’s increasing use of preferred stocks to fund Bitcoin purchases.
The report indicated that the company’s combined debt and preferred stock obligations rose from about $6.9 billion in early 2025 to about $21.8 billion today. Most of this increase came from preferred stock issues that helped fund additional Bitcoin acquisitions.
Under a scenario in which Bitcoin drops to $50,000, Fortune estimated that the strategy’s net asset value could fall to roughly $23 billion, a decline that would have a greater impact on shareholders because liabilities remain constant while the value of Bitcoin holdings fluctuates.
Another issue highlighted in the analysis concerns mitigation. Since launching the Bitcoin Accumulation Strategy in 2020, the number of outstanding shares in Strategy has risen from 98 million to 353 million, according to Fortune.
Recent developments at the company have also drawn attention to how future liabilities will be financed.
Ditto I mentioned By crypto.news Strategy shareholders recently approved a proposal to change STRC’s preferred stock dividend payments from a monthly schedule to biweekly distributions. Payments will now be made on the 15th and last day of each month.
“The twice-monthly payment of dividends on STRC is designed to stabilize prices, mitigate procyclicality, increase liquidity, and increase demand for STRC, while giving STRC holders the opportunity to reinvest faster.” Fung Le, president and CEO, said at the time.
At the same time, the strategy also increased its cash reserves by $100 million, bringing total dollar reserves to $1 billion. The company also resumed purchasing Bitcoin, acquiring 1,550 BTC worth approximately $101.3 million between June 1 and June 7 and bringing its total holdings to 845,256 BTC.
These cash reserves became a point of discussion after the strategy revealed it sold 32 bitcoins for roughly $2.5 million near the end of May, the first announced bitcoin sale since December 2022.
There are still concerns
In previous research Covered By crypto.news, JP Morgan said the deal appears largely symbolic and likely serves as a show of flexibility toward preferred shareholders. However, the bank warned that future dividend obligations could raise questions about financing if reserves are exhausted.
Fortune magazine expressed similar concern, claiming that annual preferred stock dividend obligations now total about $1.5 billion. According to the circular, continued reliance on new preferred stock issuances to satisfy those obligations could place additional pressure on the company’s financial structure.
Not all observers agree that the strategy faces significant risks. After JP Morgan a reportBTCTOP CEO Jiang Zhuoer argued that the company’s leverage would remain manageable even if the price of Bitcoin fell to $30,000.
Jiang also said that large bitcoin sales would undermine Strategy’s identity as a long-term holder and suggested that the company could use old, low-cost holdings to meet commitments while continuing to accumulate bitcoin through new capital raises.
