MicroStrategy's perpetual preferred shares plunged over 10% this month, falling to an all-time low of $88.59—more than $11 below its $100 par value. The slide cuts funding per share and heightens risk the firm must sell Bitcoin to meet its 11.5% dividend obligation.
MicroStrategy's perpetual preferred shares closed at a record low of $88.59 on Thursday, dipping as far as $82.50 intraday and marking a more than 10% decline over the past month. The downturn aligns with Bitcoin weakness and a hawkish Federal Reserve stance that have weighed on investor demand.
These preferred shares are engineered to trade near $100 par so that new issuances can fund Bitcoin purchases. Trading over $11 below par reduces the net proceeds per share and undermines the firm's primary cash-generation channel for acquiring additional Bitcoin.
With an 11.5% annual dividend rate unchanged for four months, the company faces mounting pressure to cover cash obligations. Limited room to issue equity due to a compressed net asset value premium may force the sale of Bitcoin holdings, which total about 846,842 BTC, to meet dividend requirements.
