Strategy (NASDAQ:MSTR) is down to $90—a 20% drop since Monday—prompting a debate over the sustainability of the company’s BTC-backed financing strategy.
Bitcoin Accumulation Engine Faces Test
In an X post on June 24, expert author Shanaka Anslem Perera cited Strategy’s August 2025 filing pointing to a scenario where shares traded below 1x NAV, then it would consider issuing credit to repurchase its own stock.
Issuing stock above NAV can increase Bitcoin (CRYPTO: BTC) exposure per share for existing shareholders. However, issuing equity below NAV has the opposite effect, diluting Bitcoin ownership on a per-share basis.
As a result, the mechanism that helped Strategy build the world’s largest corporate Bitcoin treasury becomes less attractive when shares trade below the value of the underlying Bitcoin holdings.
Critics contend that the company’s ability to continuously fund Bitcoin purchases through equity issuance is effectively paused until the stock regains a premium valuation.
Dividend Obligations Draw Attention
The debate has also focused on Strategy’s growing stack of preferred securities.
Analysts estimate the company now carries annual preferred dividend obligations of roughly $1.7 billion across multiple preferred stock issuances.
While Strategy maintains approximately $1.4 billion in cash reserves, some market participants argue those reserves represent a finite runway if Bitcoin remains under pressure and equity markets remain unreceptive.
Concerns increased after Strategy disclosed the sale of 32 Bitcoin earlier this year to fund a preferred dividend payment, marking the company’s first Bitcoin sale since 2022.
Critics viewed the transaction as evidence that the company may eventually need to rely on treasury assets if traditional financing channels become constrained.
What’s Next?
The current situation represents one of the first large-scale stress tests of the corporate Bitcoin treasury model.
Bulls argue that Strategy has successfully navigated previous Bitcoin bear markets and still possesses multiple financing options.
Skeptics counter that the combination of fixed dividend obligations, limited cash reserves and a stock trading below Bitcoin NAV creates a fundamentally different challenge than prior downturns.
Investors are currently concerned if Bitcoin can recover before Strategy’s balance sheet faces a prolonged period of operating below the threshold it identified nearly a year ago.
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