Liquidation calls are intensifying for Strategy (MSTR) as the cryptocurrency market experiences significant volatility, particularly concerning bitcoin, which has sharply declined. The company’s common stock has plummeted nearly 70% from its peak last year, raising concerns about its capacity to fulfill financial obligations.
Throughout 2025, Strategy has predominantly utilized perpetual preferred stock for financing its bitcoin acquisitions. The firm has also relied on at-the-market (ATM) common share issuances to cover its preferred dividend responsibilities. Under the leadership of Executive Chairman Michael Saylor, the company has launched four different series of U.S.-listed preferred stock this year.
One of these series, Strike (STRK), offers an 8% fixed dividend and is convertible into common stock at a price of $1,000 per share. Another series, Strife (STRF), boasts a 10% fixed non-cumulative dividend and is positioned as the most senior among the preferreds. STRD, which pays a 10% cumulative dividend, ranks junior in the preferred stock hierarchy. Lastly, Stretch (STRC), introduced in August at an initial price of $90, offers a 10.5% fixed cumulative dividend and is trading slightly above its original offering price.
Recent trading data shows STRK priced at approximately $73 with an 11.1% current yield, marking a 10% decline since its issuance. STRD has performed the weakest, now trading around $66, reflecting a yield of 15.2% and a total return loss of 22%. In contrast, STRF is the only series currently above its issue price, trading near $94 and yielding an 11% gain, thanks to its senior ranking.
Market analysts are now evaluating a critical threshold for bitcoin, specifically the $74,400 mark. This level represents the point at which Strategy would begin to incur losses on its accumulated bitcoin holdings, following over five years of accumulation. While this figure is significant for discussions about the company’s financial health, a dip below this threshold will not necessarily trigger a margin call or force the company to liquidate any portion of its bitcoin assets.
The looming pressure point appears to be approximately two years away, specifically on September 15, 2027. At that time, holders of $1 billion in 0.625% convertible senior notes will gain their first put option. These notes were originally priced when MSTR shares were valued at $130.85, with a conversion price set at $183.19. Given the current stock price of around $168, conversion is unlikely, leading holders to probably prefer cash repayment. Such a scenario could compel Strategy to either raise capital or liquidate assets unless its share price rebounds significantly before 2027.
Despite these challenges, Strategy retains multiple avenues to cover its annual preferred dividend obligations. The firm has the option to continue issuing common shares through ATM offerings, sell portions of its bitcoin holdings, or issue dividends in-kind using newly released stock.
However, it is important to note that while preferred dividends do not pose an immediate risk, resorting to any of these strategies might undermine investor confidence in Strategy. This erosion of trust could impede the company’s capacity to secure additional capital for further bitcoin investments, at least temporarily.
