MicroStrategy Preferred Shares Hit 17.5% Discount as Cash Reserves Drop 36%
MSTR•MicroStrategy’s preferred shares plunged to a 17.5% discount to $100 par, trading 13% below par after Bitcoin selloff and leaving the company with an $11 billion unrealized loss on holdings. Cash reserves have dropped 36% since January to $1.4 billion, prompting calls to rebuild a $2.8 billion buffer before resuming Bitcoin purchases.
1. Preferred Share Discount and Bitcoin Loss
MicroStrategy’s preferred shares fell to $82.50 last week, marking a 17.5% discount to the $100 par value, and were trading at nearly a 13% discount at the most recent close. The selloff has driven a notional $11 billion unrealized loss on the company’s Bitcoin holdings.
2. Cash Reserves Depletion and Coverage Target
The company’s dollar cash reserve has declined 36% since the start of 2026, shrinking to $1.4 billion. Analysts suggest rebuilding the reserve to approximately $2.8 billion to cover 24 months of dividend obligations on preferred shares before further asset purchases.
3. Purchase Funding and Strategy Shift
Between June 15 and June 21, MicroStrategy bought $34.9 million of Bitcoin funded entirely through Class A common stock sales, while also boosting its cash reserve by $300 million. Following research warnings, the firm paused new Bitcoin purchases two weeks prior to refocus on cash fundamentals.
