Strategy Stock Falls Below $100 for First Time in Two Years as Analysts Pick Apart Its Bitcoin Bet

Shares of Strategy, the largest corporate holder of Bitcoin, fell below $100 on Wednesday for the first time since March 2024, leaving the company trading at a discount to the Bitcoin on its balance sheet and turning investor attention to which layer of its capital structure is still worth owning.

The stock dropped by more than 7% to near $98, steeper than a 4.6% slide in Bitcoin, and pushed Strategy's market value to roughly $36 billion. That trails the about $50 billion in Bitcoin the company holds, or 847,363 BTC, according to CoinGecko.

The reversal undercuts the premium-to-net-asset-value that long anchored Strategy's pitch that MSTR offered leveraged exposure to Bitcoin. The shares are down more than 80% from their November 2024 high near $474.

With MSTR now below the value of the coins it holds, the case for owning the stock instead of Bitcoin is harder to make, and the market is repricing each piece of Strategy's stack separately: senior debt, preferred shares, common equity and the underlying Bitcoin.

MSTR Vs. BTC

On a Defiant livestream, two longtime investors argued those pieces are now pulling against one another.

"There's no analysis where owning MSTR stock instead of owning Bitcoin is a smart play today unless something changes with regard to how Saylor is running this company," said Jeff Dorman, co-founder and chief investment officer of Arca, a digital-asset investment firm that manages more than $300 million. Dorman said his comments were his own and not investment advice.

Austin Campbell, founder and managing partner of Zero Knowledge and a former Paxos executive, rejected the idea that the stock faces a sudden wipeout.

"The death spiral implies that strategy will explode in some sort of spectacular fashion," Campbell said. "But the reality is it could just melt for five years." He added that the episode is "breaking the spell of Michael Saylor," echoing the path of the Grayscale Bitcoin Trust, which traded at a premium for years before sliding to a deep discount.

The Funding Math Tightens

The pressure starts with the preferred stock. Strategy's STRC, a variable-rate perpetual preferred designed to trade near its $100 par value while paying an 11.5% annual dividend, has traded in the mid-$80s and today slid to a new record low. It’s down over 6% to $81.8.

When STRC sits below par, Strategy cannot issue fresh preferred shares on favorable terms, which narrows the channel it uses to fund Bitcoin purchases.

The cash side has eroded in step. CryptoQuant Head of Research Julio Moreno said Strategy's dividend coverage has fallen from more than seven years at the start of 2026 to roughly 14 months. Annual preferred dividend obligations have climbed to about $1.2 billion, up from around $300 million, as the company sold more STRC to fund purchases.

Cash reserves dropped 38% over the same stretch. A $1.5 billion repurchase of convertible notes due 2029 tightened the buffer further. Restoring 24 months of coverage would take roughly $2.8 billion in reserves, close to double the current level, Moreno estimated.

CryptoQuant chief executive Ki Young Ju went further on X, saying Strategy's buying now behaves more like a "liquidity sink" than a price catalyst, and urging the company to pause purchases and rebuild reserves. Strategy made its first Bitcoin sale since 2022 on June 1, offloading 32 BTC to show it could meet obligations through asset sales if needed. MSTR fell about 6% on that disclosure.

Where the Value Sits

Dorman, who spent more than 17 years trading at firms including Merrill Lynch and Citadel, said most assets sitting on a balance sheet trade at a discount to their net value, not a premium. The premium MSTR once carried was the exception, not the rule.

His framework is arithmetic. Subtract the debt and the preferred shares from the Bitcoin to find the unencumbered coins backing the common stock, then value the common at a discount to that figure. On the livestream he put the net Bitcoin near $34 billion and said MSTR would only become interesting to him around a $28 billion market value, roughly 30% below where it traded then. At Wednesday's lower Bitcoin price, the cushion is thinner.

Selling stock below net asset value to buy Bitcoin compounds the problem. Issuing shares at a discount to the coins they buy dilutes existing holders rather than adding value, Dorman said.

The math runs against the common stock. Dorman said the safest place in the structure is the convertible debt, which is well covered by the Bitcoin ahead of it.

"If I had to own any part of strategy's capital stack right now, I'd probably be a buyer of the converts," he said. He was more cautious on the common and called the preferreds a "stay away."

Campbell flagged the preferreds for a different reason: legal risk. Strategy marketed STRC as something close to a money-market product, he said, which would make cutting the dividend "lethal" by inviting plaintiffs' attorneys and regulators.

Rip the Bandaid

Dorman's prescription is to stop the bleeding in one move. Strategy should "rip the bandaid off" and sell about $5 billion of Bitcoin, hold it as cash to cover roughly three years of dividends, and turn into a quiet, predictable holder, he said. He likened that outcome to a phone-book business: a melting franchise that still throws off cash for years. He called the early convertible-note buyback "a huge mistake" that drained cash the company did not need to spend.

Campbell's alternative is to attack the discount directly. With STRC below par, Strategy could issue common stock to buy back the preferreds and retire them, locking in a profit on each share and cutting future dividend obligations.

The nuclear option, cutting the preferred dividend outright, drew the lowest odds from both. Preferred dividends carry no hard obligation, so skipping them would not trigger a default. But it would shut Strategy out of the capital markets and, given how STRC was sold, invite litigation. Saylor controls about 40% of the vote, which limits any outside push to change course. Neither Dorman nor Campbell sees near-term bankruptcy or forced liquidation, with Bitcoin holdings of about $50 billion sitting well above the roughly $20 billion in debt and preferreds ahead of the common.