Strategy (MSTR), formerly MicroStrategy, has spent the past several years building one of the most aggressive Bitcoin (BTCUSD)-focused corporate strategies in the public market. The company has repeatedly raised capital through equity, convertible bonds, and preferred securities to fund Bitcoin purchases, effectively transforming itself from an enterprise software company into a leveraged Bitcoin investment vehicle. That strategy worked well as long as Bitcoin kept rising, investor appetite remained strong, and MSTR stock traded at a meaningful premium to the value of its underlying Bitcoin holdings.
However, that model has come under increasing pressure amid the current weakness in the crypto market. Strategy’s common stock has been weighed down by the decline in Bitcoin prices, while its largest dividend-paying preferred stock, Stretch (STRC), recently fell well below its $100 par value and hit a record low last week. That created a major challenge for the company because STRC has become one of Strategy’s most important vehicles for raising capital and financing Bitcoin acquisitions.
