Strategy Nears Breakeven on Bitcoin Decline, with a Major 18-Month Milestone Ahead

Strategy’s Balance Sheet Stable, but Raising Capital Faces Challenges

Strategy (MSTR) is not at risk of an imminent collapse, but continued market weakness and Bitcoin’s recent decline could complicate efforts to raise new capital. The company’s common stock has fallen nearly 70% from last year’s peak, fueling speculation about its ability to meet obligations.

Throughout 2025, Strategy has primarily relied on perpetual preferred stock to fund Bitcoin purchases, while using at-the-market (ATM) common share issuances mainly to cover preferred dividend obligations.

Under Executive Chairman Michael Saylor, the company issued four U.S.-listed preferred series this year:

Strike (STRK): 8% fixed dividend, convertible at $1,000 per share.
Strife (STRF): 10% fixed non-cumulative dividend, senior-most preferred.
STRD: 10% cumulative dividend, junior preferred.
Stretch (STRC): 10.5% fixed cumulative dividend, debuted at $90 in August and trades just above offer price.

As of Nov. 21, STRK trades near $73 (11.1% yield), STRD at $66 (15.2% yield), and STRF at $94, the only series above issuance.

Bitcoin Holdings Near Breakeven

Recent Bitcoin weakness has highlighted the $74,400 level, where Strategy would technically move into the red on its Bitcoin holdings. However, a drop below this level does not trigger margin calls or forced sales.

The next structural pressure point is September 15, 2027, when holders of $1 billion in 0.625% convertible senior notes can exercise a put option. Priced when MSTR traded at $130.85 with a conversion price of $183.19, these notes are unlikely to convert at today’s stock price of ~$168, meaning holders would probably seek cash repayment, potentially requiring the company to raise funds or liquidate assets unless the share price rises significantly before then.

Options to Maintain Dividends

Even if MSTR’s market valuation relative to Bitcoin holdings (mNAV) declines further, Strategy has several ways to cover its preferred dividend obligations:

ATM common share issuance
Selling small portions of Bitcoin holdings
Paying dividends in-kind with new shares

While immediate risks to dividends are limited, relying on these measures could erode investor confidence and temporarily limit the company’s ability to raise new capital for additional Bitcoin purchases.