Strategy’s $13 B Bitcoin Loss and 25% Preferred Share Decline Raise Risk
MSTR•Strategy holds 847,363 Bitcoin at an average cost of $75,500, resulting in an unrealized $13 billion loss after Bitcoin slid below $60,000. Its high-yield preferred shares have dropped 25% from par, while the company’s $1.4 billion cash reserves cover preferred dividend costs for barely a year.
1. Heavy Bitcoin Losses
Strategy holds 847,363 Bitcoin at an average acquisition cost of $75,500 per coin. With Bitcoin trading below $60,000, the company is sitting on an unrealized loss of approximately $13 billion, significantly eroding its investment premium.
2. Preferred Shares Under Pressure
The company’s high-yield preferred stock has plunged roughly 25% from its engineered par value, dipping as low as $71.25 before recovering slightly. Investor concerns over dividend sustainability have intensified as volatility impacts this credit-like instrument.
3. Cash Reserves and Dividend Sustainability
Strategy reported $1.4 billion in cash reserves as of June 22, enough to cover its preferred dividend obligations for just under 12 months at current payout rates. Any further drawdown or Bitcoin decline could force asset sales or dividend cuts.
4. Securities Probe and Leadership Response
A securities investigation is examining potential misleading statements by company executives, adding legal uncertainty. Executive Chairman Michael Saylor has publicly reaffirmed commitment to disciplined capital allocation and long-term value creation without addressing the probe directly.
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