Key takeaways
- Strategy’s common stock fell nearly 6%, settling around $109 after STRC’s preferred stock fell to an all-time low of $89.
- A fall in STRC’s price below the $100 par value has suspended the strategy’s ability to issue additional shares for Bitcoin acquisitions.
- In May, Strategy liquidated 32 bitcoins — marking the cryptocurrency’s first sale since 2022 — to cover STRC’s dividend obligations.
- Board member Jarrod Patten offloaded nearly $9 million worth of MSTR stock over a three-month period. Additional executives were sold earlier this year
- Wall Street firms including Bernstein, TD Coin, Citigroup and BTIG maintained positive ratings with price targets ranging from $250 to $450.
Shares of Strategy (MSTR) saw a sharp 6% decline on Thursday, hovering near $109, as the company faced mounting challenges from several fronts — deteriorating preferred stock valuations, executive stock sales, and a weak cryptocurrency market following the Federal Reserve’s recent policy announcement.
The primary catalyst was the decline in STRC stock, Strategy’s Stretch’s favorite stock, which fell to an all-time high of $89. This development carries significant implications because STRC’s trading price below its $100 notional value has forced the strategy to suspend its market offering program – the main means through which it generates capital to purchase Bitcoin.
With this financing avenue now closed, Strategy Bitcoin’s basic acquisition model has stalled.
The company is violating the Bitcoin-only policy
At the end of May, Strategy liquidated 32 BTC for approximately $2.5 million to meet STRC’s earnings requirements. The deal marks the company’s first bitcoin sale since starting its accumulation program in 2022.
CEO Michael Saylor has consistently defended the reservations-only approach. The sale represents a major shift away from that established strategy, although analysts from Benchmark and TD Cowen dismissed concerns about a broader strategic collapse.
Further exacerbating the competitive dynamics, Strive’s rival SATA preferred stock keeps trading above $99 while offering a 13.69% yield, luring dividend-seeking investors towards an alternative avenue.
Market analytics firm QCP believes the strategy has approximately 7.5 months of liquidity remaining to meet its preferred dividend obligations. QCP highlighted that the company may ultimately face a decision between securing additional capital, further diluting existing shareholders, or liquidating additional Bitcoin holdings.
The strategy recently repurchased approximately $1.5 billion of convertible debt instruments due in 2029 while simultaneously raising approximately $200 million through MSTR stock sales — part of which funded the purchase of another $100 million worth of bitcoin.
Complex stock sales concerns
Director Jarrod Batten exercised options on 1,500 Class A shares with an exercise price of $18,236 and disposed of them for approximately $134, for a net of approximately $200,000. Throughout the previous three months, Batten had divested 55,750 shares of MSTR stock resulting in gross proceeds of approximately $9 million.
He maintains ownership of 28,406 Class A shares along with 44,250 outstanding director options.
Earlier this year, CEO Fong Lu, CFO Andrew Kang, and former Executive Vice President Wei Ming Chau sold millions of MSTR shares.
The Federal Reserve’s unanimous June 17 12-0 decision kept interest rates at 3.50%-3.75%, though an updated dot chart revealed that nine of 18 FOMC participants now expect at least one rate increase before the end of 2026. This hawkish shift has pressured bitcoin and cryptocurrency-related stocks despite broader market strength.
Bitcoin It was trading at about $63,850 at press time, down about 2% over 24 hours. At this valuation, Strategy’s holdings reflect an unrealized loss of approximately $11,658 per coin compared to the average purchase price.
MSTR ended Wednesday’s session down 5.09% at $116.56, followed by an additional 2.1% decline to $114.04 during Thursday morning trading. Shares are now down roughly 31% over the next month.
Despite these headwinds, Bernstein maintained her buy recommendation with a $450 price target. TD Cowen maintains its $350 target, Citigroup at $260, and BTIG at $250.
