Michael Saylor responded to the deep sell-off in Strategy and preferred stocks on Friday with a statement about X.
“Volatility tests every capital structure,” Saylor books. “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 resolve. $MSTR.”
The tweet landed as shares of MSTR and STRC, the strategy’s favorite perpetual variable rate stocks, hit 52-week lows. MSTR has lost more than 80% from its all-time peak. STRCwhich has a face value of $100, is trading near $74 – a 26% discount. When preferred shares trade below par, the mechanism that finances Bitcoin purchases through preferred issuance breaks down: the company cannot raise capital on favorable terms on trading instruments at a discount.
Bitcoin rose to $58,000 on Wednesday For the first time since October 2024This pushed the paper strategy’s losses to more than $14 billion. The company holds 847,363 bitcoins with an average purchase price of $75,680 per coin – a difference of more than $17,000 per coin at current prices.
MSTR shares, which were It fell about 25% over five trading days Entering Friday, this decline extended somewhat into pre-market trading as Bitcoin’s decline appeared to stagnate. The stock is trading at an mNAV below 1.0, meaning the market is valuing the strategy’s shares at a discount to Bitcoin on its balance sheet.
This is important because the company’s model is based on a premium: the strategy issues preferred shares or instruments above the NAV, deploys the proceeds in Bitcoin, and raises the NAV per share in the process. With the premium gone, both capital taps are tied up at the same time.
Monetary pressures on the strategy are deepening
The pressure on capital structure extends beyond the price of Bitcoin. Annual dividend obligations on the strategy’s preferred instruments — STRC, STRK, STRF, STRD, and STRE — have risen from $300 million at the start of 2026 to $1.2 billion, a four-fold increase in six months. Cash reserves have fallen by 38% this year. Dividend coverage, once above seven years, has been compressed to about 14 months.
Bloomberg a report On Thursday, he described investor scrutiny of Saylor’s financing model as the most intense the company has encountered. CryptoQuant issued a note this week calling for the strategy to halt Bitcoin purchases and rebuild cash to $2.8 billion before accumulating resumes.
strategy Made the first sale of Bitcoin In four years in early June, 32 bitcoins had been offloaded at an average of $77,135 per coin. Saylor framed the move as evidence of the company’s ability to cover its dividend obligations by divesting assets. The market reaction suggests that the framing did not hold.
last week, The strategy bought 520 Bitcoin — a fraction of its previous pace — and put $300 million of the $335.5 million stock raise in cash instead of bitcoin. Saylor did not elaborate on the details of the tweet beyond the statement posted on X.
