MicroStrategy Cash Reserves Down 38% as Dividend Coverage Falls to 14 Months
STRC•MicroStrategy’s USD cash reserve declined 38% year-to-date to $1.4 billion as annualized dividend obligations quadrupled, reducing STRC’s dividend coverage from over seven years to 14 months. An analytics report warns that Strategy’s $10.6 billion unrealized bitcoin losses could force asset sales and erode shareholder value without a disciplined purchase strategy.
1. Cash Reserve Decline and Dividend Obligations
MicroStrategy’s USD cash reserve fell 38% since the start of the year, leaving $1.4 billion available while annual dividend obligations have roughly quadrupled over the same period. This rapid change cut STRC’s dividend coverage from more than seven years to just 14 months, well below the roughly $2.8 billion needed for prior coverage levels.
2. Unrealized Bitcoin Losses and Purchase Strategy
The company holds approximately $50 billion in bitcoin at current prices but carries an aggregate unrealized loss of $10.6 billion, with all purchases made since 2024 underwater and 2026 buys suffering the steepest losses. Analysts highlight that continued purchases during a bear market, rather than preserving cash, heighten the risk of forced sales that would crystallize significant losses.
3. Preferred Stock Performance Pressure
Preferred shares traded under their $100 par value for the first time since 2024, hitting a record low of $79.85 and down over 43% in June. After breaching a 52-week low, STRC’s decline reflects growing investor concern over dwindling cash reserves, mounting dividend obligations, and potential value destruction from bitcoin volatility.
