Saylor Defends Strategy Amid Market Volatility and Cash Crunch

Michael Saylor responded to the recent selloff in Strategy's stock and preferred shares by issuing a statement on X, acknowledging that volatility tests every capital structure. He emphasized that Strategy remains focused on Bitcoin, disciplined capital allocation, credit quality, and long-term value creation.

The company's MSTR shares have shed more than 80% from their all-time peak, while STRC, its variable-rate perpetual preferred, has traded near $74 - a 26% discount to its par value of $100. This discount is significant because when preferred shares trade below par, the mechanism that funds bitcoin purchases through preferred issuance breaks down.

Strategy holds 847,363 Bitcoin at an average purchase price of $75,680 per coin, resulting in a gap of more than $17,000 per coin at current prices. MSTR shares now trade at an mNAV below 1.0, meaning the market values Strategy's shares at a discount to the Bitcoin on its balance sheet.

The company's cash strain deepens further with annual dividend obligations on preferred instruments rising from $300 million in January to $1.2 billion, a fourfold increase in six months. Cash reserves have fallen 38% this year, and dividend coverage has compressed to about 14 months.