Strategy (MSTR) Stock Drops as Company Prepares $1.25B Bitcoin Sale

Key Takeaways

• Strategy is preparing to liquidate up to $1.25 billion in Bitcoin holdings to strengthen its cash position, currently sitting at $2.55 billion.
• Two separate $1 billion buyback initiatives have been authorized — targeting both common and preferred shares.
• The firm’s mNAV metric fell beneath the critical 1.0 threshold on June 27, eliminating its capital-raising edge.
• STRC preferred stock dividend increased to 12%, with new policies requiring cash reserves to cover a full year of obligations.
• Shares of MSTR were trading at $82.31, reflecting a 3.5% decline, as Bitcoin hovered around $60,275.

Strategy (MSTR) is executing a dramatic strategic reversal. The enterprise that staked its reputation on accumulating and never selling Bitcoin is now preparing to offload a significant portion — a development that has captured Wall Street’s full attention.

Strategy Inc, MSTR

In a June 29 filing, Strategy outlined intentions to divest up to $1.25 billion in Bitcoin assets. The capital raised will strengthen the company’s treasury, finance preferred shareholder dividends, service debt obligations, and support general corporate requirements.

MSTR shares climbed approximately 5% during pre-market hours following the disclosure, though by regular trading the stock had retreated to $82.31, representing a 3.5% decline. Bitcoin was trading near $60,275, posting a modest 0.6% gain over the previous day.

According to the filing, Bitcoin disposals will occur opportunistically based on prevailing market dynamics and capital requirements — not according to any predetermined timeline.

The Economics Have Shifted

For an extended period, Strategy’s approach was remarkably straightforward: raise capital through securities offerings, acquire Bitcoin, then repeat the cycle. This framework delivered exceptional results during Bitcoin’s bull runs, particularly when the company’s mNAV — measuring enterprise valuation against Bitcoin holdings — remained substantially above 1.

That crucial metric slipped below parity on June 27. This development signals that the valuation premium enabling Strategy to access inexpensive capital for Bitcoin acquisitions has essentially vanished.

Both common and preferred securities have experienced severe declines tracking Bitcoin’s downturn. MSTR has plummeted nearly 80% during the past twelve months. The perpetual preferred instruments Strategy introduced in 2025 — initially conceived as a mechanism to expand Bitcoin holdings without diluting existing shareholders — have tumbled below $75, significantly beneath the $100 par value necessary for economically sensible purchases.

Management also indicated greater restraint regarding future common stock issuances, especially when share prices approach net asset value.

Dual share repurchase authorizations totaling $1 billion each were unveiled — one addressing Class A common stock, the other targeting preferred Digital Credit Securities.

A newly adopted board mandate now obligates Strategy to maintain treasury reserves sufficient to cover no less than twelve months of anticipated preferred dividends and interest charges. Current reserves total $2.55 billion.

Warning Signs Emerged Weeks Ago

The shift became evident as early as June 1, when Strategy revealed it had liquidated 32 Bitcoin — marking its first sale since 2022. While negligible compared to its approximately $51 billion total position, the symbolic significance was undeniable.

Bitcoin skeptic Peter Schiff quickly seized on the development. In a June 29 commentary, he characterized Strategy as “now a Bitcoin seller,” highlighting the company’s rebranded Bitcoin Monetization Program.

FalconX senior derivatives trader Bohan Jiang provided a more balanced perspective: “While there is more selling pressure on Bitcoin, it is definitely positive for the stock, and both the common and preferred shareholders.”

The STRC preferred dividend rate was elevated to 12% as part of the restructuring announcement.

Bitcoin has faced headwinds lately, dipping below $59,000 the previous week before staging a partial recovery.

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