- Strategy has seen its stock drop nearly 70% from last year’s highs amid a Bitcoin Price decline.
- The company mainly uses preferred stock to fund Bitcoin purchases, with common shares issued to pay dividends.
- Several preferred stock series exist, each with different dividend rates, prices, and seniority.
- Bitcoin’s recent drop brings the company close to the breakeven point on its bitcoin holdings but does not trigger immediate liquidation risk.
- The nearest structural pressure from convertible notes occurs in 2027, with options to manage dividend payments and capital needs still available.
Strategy, led by Executive Chairman Michael Saylor, faces growing liquidation concerns as bitcoin’s value falls and the firm’s stock has slumped almost 70% from its 2023 peak. Throughout 2025, the company has primarily financed bitcoin purchases through perpetual preferred stock, while issuing common shares at the market mainly to cover preferred dividend payments.
During the year, Strategy has issued four U.S.-listed preferred stock series. The Strike (STRK) series pays an 8% fixed dividend and converts to common stock at $1,000 per share. Strife (STRF), with a 10% fixed non-cumulative dividend, holds the highest seniority among the preferred stocks. The STRD series also pays a 10% cumulative dividend but ranks junior in the structure. Stretch (STRC), launched in August at $90 with a 10.5% fixed cumulative dividend, currently trades slightly above the issue price.
As of November 21, STRK traded near $73, yielding about 11.1% with an 10% decline since issuance. STRD was the weakest, down to roughly $66, yielding 15.2% and showing a 22% total loss. STRF remains the strongest, trading around $94 and offering an 11% gain, reflecting its senior status.
Bitcoin’s recent decline has brought market focus to the approximately $74,400 level at which Strategy’s bitcoin investments would become unprofitable after over five years of accumulation. However, dropping below this price does not trigger margin calls or force the sale of bitcoin holdings.
The closest major financial pressure comes on September 15, 2027, when holders of $1 billion in 0.625% convertible senior notes gain a put option. These notes were issued when the stock traded at $130.85 and set a conversion price of $183.19. With the current stock price near $168, conversion seems unlikely, meaning holders may seek cash repayment. This could require the company to raise funds or sell assets unless the stock rises before then.
Even if the market valuation of Strategy‘s stock relative to their bitcoin holdings decreases or turns negative, the company still has methods to meet its annual preferred dividend obligations. Options include issuing common shares through at-the-market offerings, selling small amounts of bitcoin, or paying dividends with newly issued stock.
While these measures protect dividend payments, their use could further reduce investor confidence and temporarily halt efforts to raise capital for additional bitcoin investments.
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