Strategy (MSTR) Pivots to Preferred Capital as Stock Faces 75% Drawdown From Peak
The world's largest corporate Bitcoin treasury firm, Strategy Inc. (NASDAQ: MSTR), is going through a difficult period. To draw in investors
Quick overview
- Strategy Inc. is increasing the yield on its preferred stock to 11.50% amid a significant decline in its common shares, which are down 75% from their peak.
- The company is shifting its financing strategy from common equity to preferred shares to support ongoing Bitcoin purchases, having raised $7 billion through preferreds last year.
- Despite a net loss of $12.4 billion in Q4 2025, Strategy continues to accumulate Bitcoin, holding 717,722 BTC, one of the largest concentrations among publicly traded firms.
- Analysts suggest that Strategy's stock is undervalued at $663 per share, but concerns about unprofitability and capital dilution persist.
The world’s largest corporate Bitcoin treasury firm, Strategy Inc. (NASDAQ: MSTR), is going through a difficult period. To draw in investors, it is increasing the yields on its preferred stock, although its common shares are still about 75% below their peak.
The business is increasing the monthly dividend on its STRC preferred stock, also known as “Stretch,” to 11.50% for March 2026, up 25 basis points from the previous month’s 11.25%, Chairman Michael Saylor said on social media on Sunday. According to Strategy’s website, the change is a part of a purposeful mechanism that keeps the perpetual preferred shares trading close to their par value of $100. The next payout of the monthly dividend is planned for March 31.
“STRC’s dividend rate is adjusted monthly to encourage trading around STRC’s $100 par value and to help strip away price volatility,” according to the business’s website.
The action highlights a more comprehensive strategy shift. In order to finance its continuous Bitcoin purchases, Strategy is progressively turning from issuing common equity to issuing preferred shares, according to CEO Phong Le during a February earnings call. “Last year, a stretch and our perpetual preferreds raised $7 billion — that’s 33% of the entire preferred market,” Le stated. “We will start to transition from equity capital to preferred capital.”
A Deep Hole for Common Shareholders
Those who own common stock in Strategy are suffering as a result of the pivot. The stock ended Friday at $129.50, down 2.92% for the day and a startling 75% from the November 2024 intraday high of $543. MSTR is down 49.3% over the last 12 months and has lost 17.6% so far this year.
The general decline in cryptocurrency is reflected in the fall of common equity. Bitcoin BTC/USD is currently selling far below Strategy’s average acquisition cost of $76,020 per coin, having dropped almost 23% so far this year. To date, the Bitwise Bitcoin Standard Corporations ETF (OWNB), which follows publicly traded firms with sizable Bitcoin holdings, has lost 16.1% of its value.
Little respite was provided by Strategy’s Q4 2025 earnings report, which was made public in early February. Despite revenue increasing 1.9% year over year to about $123 million, the company reported a net loss of $12.4 billion for the quarter, which caused the stock to collapse 13% in a single day to around $107 per share. With $477 million in revenue, the corporation reported a loss of more than $4.2 billion on a trailing basis.
MicroStrategy’s Still Buying Bitcoin
Strategy continues to amass Bitcoin in spite of the decline. The week of February 16 marked the company’s 100th Bitcoin purchase, paying over $39.8 million for 592 BTC. At 717,722 BTC, total holdings are currently among the highest concentrations of Bitcoin held by any publicly traded firm.
Uncertainty over how quickly that number will increase is reflected in prediction markets. As of right now, Polymarket only indicates a 37% chance that Strategy will declare ownership of at least 740,000 Bitcoin by March 31, 2026.
Strategy (MSTR) Stock Valuation Debate
The significant discrepancy between Strategy’s Bitcoin holdings and its declining stock price has rekindled discussion regarding the company’s valuation. MSTR’s fair value is $663 per share, according to a widely read analyst narrative from Simply Wall St., suggesting that the company is more than 80% undervalued at current pricing. With scenario research on future Bitcoin prices, anticipated treasury growth, and the premium investors have historically been prepared to pay over net asset value, that assessment predominantly views Strategy as a leveraged Bitcoin vehicle.
However, the company’s continual unprofitability, the substantial dilution risk from continuous capital raises, and the volatility that comes with owning a single, extremely variable asset are the main points of contention for those who oppose that framing. Once a rival to IBM and Oracle, Strategy’s historical enterprise analytics software division today makes up a very small portion of the company’s total valuation.
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