Strategy Stock Falls 9%, $2.21B Cash Covers 10-Month Dividend, Faces Probe
MSTR•Strategy stock closed 9% lower after plunging to a 52-week low as investors questioned its leveraged Bitcoin strategy. The company reports $2.21B in cash reserves sufficient to fund its preferred dividend for 10 months but faces a Rosen Law Firm investigation and a CryptoQuant recommendation to pause Bitcoin purchases.
1. Stock 52-Week Low and Price Decline
Strategy’s common shares dropped over 9% on June 25, extending a seven-session slide that led to a 52-week low as investors reassessed the financial burden of its leveraged Bitcoin accumulation model and related preferred share risks.
2. Cash Reserves and Dividend Funding
The company holds $2.21 billion in cash, which management says is enough to fund the preferred stretch dividend for 10 months, following the sale of 32 BTC in late May to shore up its high-yield preferred stock.
3. Rosen Law Firm Investigation
A shareholder class action probe has been launched to determine whether Strategy and its executives made materially misleading statements about its Bitcoin treasury strategy, profitability outlook and the risks inherent in its aggressive accumulation financing model.
4. CryptoQuant’s Recommendation to Pause Bitcoin Buys
CryptoQuant urged Strategy to halt new Bitcoin purchases and rebuild its U.S. dollar reserves, warning that a narrowing cash buffer could jeopardize dividend commitments on preferred shares and strain the funding structure behind its Bitcoin strategy.
