There is a notable quiet in the market as Strategy moves into a phase it has rarely experienced, shaped not by rapid gains or euphoric momentum but by the pressure of a falling bitcoin price, a declining equity premium, and investors becoming acutely aware of the leverage embedded in the company’s structure. For years the firm thrived in an environment where its aggressive accumulation strategy was rewarded, and its premium to net asset value reached levels unimaginable for a traditional treasury-heavy business. Now the atmosphere is different. The stock has fallen nearly seventy percent from last year’s peak, bitcoin’s recent decline has eroded structural confidence, and the conversation has shifted from admiration to questions about sustainability, liquidity flexibility, and the limits of long-duration leverage.
Throughout 2025, Strategy relied heavily on perpetual preferred stock as its main source of capital, directing nearly all resources toward buying bitcoin regardless of market conditions. Rather than issuing common stock extensively, the company preserved the ATM program mainly to fund its growing preferred dividend obligations. Under Michael Saylor’s leadership, four preferred stock series were issued, each with distinct risk characteristics, seniority, and yield profiles, designed to layer capital to support larger treasury ambitions without immediate cash strain.
The STRK series was the foundation with an eight percent fixed dividend and a conversion price of one thousand dollars per share, attractive for yield and embedded equity optionality when common shares traded higher. STRF, with a ten percent fixed non-cumulative dividend and senior positioning, retained value as bitcoin and common shares declined. STRD, paying ten percent cumulative, occupied a middle ground, appealing at issuance but more vulnerable in today’s cautious market. STRC, the most recent series, offered a ten and a half percent cumulative dividend and launched at ninety dollars, trading slightly above that today.
Performance across these series highlights investor sentiment. STRK trades near seventy-three dollars, yielding over eleven percent and down ten percent from issuance. STRD has fallen hardest to around sixty-six dollars, pushing yields above fifteen percent, signaling market doubt about its placement. STRF remains above issue near ninety-four dollars, reflecting respect for seniority in a cautious environment. STRC’s stable pricing suggests continued yield interest but shrinking risk tolerance.
Bitcoin breakeven levels have returned to focus. After years of accumulation, Strategy’s treasury is near its aggregate breakeven around seventy-four thousand four hundred dollars. This fuels discussion but has no direct link to forced selling as most of Strategy’s capital structure is long-duration and unsecured. The real pressure point arrives in 2027, when holders of one billion dollars in convertible senior notes gain their first put option. Priced when the stock traded higher, conversion into equity is unlikely, making cash repayment more probable unless the stock rises significantly, intensifying liquidity considerations.
Strategy still has tools to manage this environment. The ATM program can drip common shares into the market to cover preferred dividends, the firm could sell portions of its bitcoin holdings without abandoning its core thesis, and it can distribute preferred dividends in-kind through share issuance. These actions do not indicate immediate distress but affect market perception, and perception influences confidence, which has historically supported Strategy’s premium to bitcoin.
Aggressive use of these levers could soften market perception. A company known for relentless accumulation adjusting liquidity through equity issuance or bitcoin sales could change the narrative and make future preferred raises more difficult. Despite this, Strategy remains far from a liquidity crisis or operational risk. Preferred dividends are manageable, notes are long-dated, and the company remains one of the most efficient public vehicles for bitcoin exposure. What has shifted is the margin for error. A firm that once thrived on asymmetric upside is now judged by downside discipline. Investors are recalibrating, not abandoning, questioning the same mechanisms that elevated the company as leverage interacts with a more volatile market.
The next phase for Strategy will be defined by how it positions itself for 2026 and 2027, manages preferred structures during a more cautious cycle, and balances long-term vision with short-term liquidity expectations. The company retains control, has levers, and has time, but the market is observing closely. Every movement in preferreds, every ATM sale, each treasury update, and shifts in the common stock’s premium signal where confidence is heading.
This moment is not about collapse. It is about complexity returning to a trade that once seemed effortless, recognizing that conviction alone cannot remove refinancing cycles or structural timelines, and understanding that Strategy must navigate both bitcoin’s price and the cost of its own capital, shaping the evolution of its thesis.
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