Liquidation calls from outside are getting louder for Strategy (MSTR) as bitcoin plummets and the company’s common stock has plunged nearly 70% from last year’s high, calling into question, for some, the company’s ability to continue meeting its obligations.
Throughout 2025, Strategy has relied on perpetual preferred stock as its primary funding vehicle for bitcoin purchases, while primarily utilizing the issuance of common stock at the market (ATM) primarily to cover its preferred dividend obligations.
Led by CEO Michael Saylor, the company issued four US-listed preferred series during the year: Strike (STRK) pays a fixed dividend of 8% and is convertible into common stock at $1,000 per share. Strife (STRF) has a non-cumulative fixed dividend of 10% and is ranked as the largest of the preferred stocks. He also pays 10% but in cumulative terms and occupies a junior position in the structure. Stretch (STRC), the newest series, debuted in August at $90 with a fixed cumulative dividend of 10.5% and is now trading just above its offering price.
As of November 21, STRK is trading near $73, a current yield of 11.1%, down 10% since its issuance. STRD has had the weakest performance, falling to around $66 for a return of 15.2% and a total return loss of 22%. STRF is the only series still above issue, trading around $94 and generating approximately 11% gain, reflecting its senior position.
Almost back to breakeven
Bitcoin’s decline in recent weeks has market participants focusing on the roughly $74,400 level at which Strategy – after more than five years of accumulation – would actually be in the red on its bitcoin holdings.
While that is surely an important level for talking points, a drop below $74,400 surely doesn’t mean the company would face a margin call or need to engage in forced sales of any part of its BTC stack.
The closest structural pressure point will occur almost two years later, on September 15, 2027, when holders of the $1 billion 0.625% convertible senior notes receive their first put option.
The notes were priced when MSTR was trading at $130.85 and had a conversion price of $183.19. With the shares now at around $168, holders would be unlikely to convert and would likely seek a cash refund, which could require Strategy to raise or liquidate assets unless the share price rises significantly before 2027.
Multiple levers remain
Even if MSTR stock’s valuation premium over bitcoin holdings (the mNAV) collapses further and perhaps even reaches a discount, Strategy still has a clear path to cover the annual preferred dividend bill.
The company can continue to issue common shares through ATM offerings, or sell small portions of its bitcoin treasury, or even pay dividends in kind with newly issued shares.
This does not mean that everything is fine. While preferred dividends are not at immediate risk, using any of the above options would surely further dent investor confidence in the strategy, likely ending, at least temporarily, any efforts to raise additional capital for further bitcoin purchases.
