MicroStrategy Stock Falls to Two-Year Low as Preferred Yield Climbs to 13.2%
MSTR•MicroStrategy shares dropped to a two-year low as its variable-rate preferred stock trades near $87, below $100 par, straining its Bitcoin-funding model. The company holds 847,363 BTC worth about $53 billion but has only $1.4 billion cash versus $1.2 billion in annual dividend obligations, needing $2.8 billion reserves to restore 24-month coverage.
1. Two-Year Low for MicroStrategy Shares
MicroStrategy shares slumped to their lowest level since mid-2024, closing near $104 after a 5% drop as investor concern mounts over its heavy Bitcoin exposure and funding structure tied to perpetual preferred stock.
2. Preferred Stock Trades Below Par
The company’s variable-rate perpetual preferred shares are trading near $87, about a 13% discount to par, lifting the effective dividend yield above 13% and escalating funding costs for future Bitcoin acquisitions.
3. Reserve Coverage Shortfall
With cash reserves at $1.4 billion against approximately $1.2 billion in annual dividend commitments, analysts estimate MicroStrategy needs an additional $2.8 billion to rebuild 24 months of coverage for its preferred obligations.
4. Bitcoin Holdings and Liquidity
MicroStrategy holds 847,363 BTC valued at roughly $53 billion; despite recent purchases of $34.9 million in Bitcoin and a $300 million cash top-up, liquidity and coverage metrics remain under scrutiny.
