Bitcoin's Plunge Brings Strategy's Holdings to Near Breakeven, but Key Test Lies 18 Months Ahead

Core Viewpoint - The company, Strategy (MSTR), is facing increasing liquidation calls as its stock price has dropped nearly 70% from last year's peak, raising concerns about its ability to meet obligations amid a significant decline in bitcoin prices [1] Financing and Preferred Stock - Throughout 2025, Strategy has primarily used perpetual preferred stock for financing bitcoin purchases, while at-the-market common share issuance has been mainly for covering preferred dividend obligations [1] - The company issued four U.S.-listed preferred series: Strike (STRK) with an 8% fixed dividend, Strife (STRF) with a 10% fixed non-cumulative dividend, Stride (STRD) with a 10% cumulative dividend, and Stretch (STRC) with a 10.5% fixed cumulative dividend [2] Performance of Preferred Series - As of November 21, STRK trades near $73, reflecting an 11.1% current yield and a 10% decline since issuance; STRD has fallen to about $66 for a 15.2% yield and a 22% total return loss; STRF is trading around $94, delivering roughly an 11% gain [3] Bitcoin Holdings and Market Pressure - The critical level for Strategy's bitcoin holdings is approximately $74,400, below which the company would be in the red; however, a decline below this level does not necessarily indicate a margin call or forced sales of bitcoin [4] - The nearest structural pressure point is on September 15, 2027, when holders of $1 billion 0.625% convertible senior notes will have their first put option, with the notes priced when MSTR traded at $130.85 [5] Dividend Coverage - Despite potential declines in the market valuation premium to bitcoin holdings, Strategy has a clear path to cover its annual preferred dividend obligations [6]