Strategy Inc shares experienced a sharp decline on Wednesday, dropping 5.2% to $98.45 in late morning trading in New York. This follows a 5.1% loss on Tuesday, which brought the stock to its lowest closing level in over two years. The company's preferred shares, known as STRC, also faced renewed pressure, falling 3.2% to $84.56, well below their $100 par value.
The sell-off comes after Strategy disclosed that it had sold approximately 2.71 million common shares through an at-the-market offering program between June 15 and June 21, raising $335.5 million in net proceeds. The company used these funds to acquire 520 bitcoin for $34.9 million, at an average price of $67,068 per coin.
Investor Concerns Mount
Julio Moreno, head of research at CryptoQuant, expressed concerns about Strategy's aggressive bitcoin buying strategy. He advised that the company should halt further bitcoin purchases and focus on rebuilding its dollar cash reserves instead. "Buying at cycle tops and accumulating during bear markets has resulted in rapid unrealized loss growth and deteriorating STRC fundamentals," Moreno said.
According to CryptoQuant, Strategy's U.S. dollar reserve has declined 38% since early 2026, while annual dividend obligations have surged to $1.2 billion, approximately four times higher than before. This has compressed dividend coverage from over seven years to just 14 months, raising red flags among investors.
Preferred Shares Under Pressure
STRC, Strategy's variable-rate preferred stock, is trading more than 10% below its $100 par value, pushing its yield to around 13%. This elevated yield typically signals that investors demand higher returns to compensate for perceived risk. The preferred shares carry an 11.50% annual dividend, paid semi-monthly in cash, but the company notes that dividends are not guaranteed and the shares are not backed by its bitcoin holdings.
Benchmark analyst Mark Palmer pushed back against comparisons to Terra's collapsed stablecoin, but acknowledged that Strategy's funding engine has become "less efficient" in the current environment.
Bitcoin Holdings and Market Position
As of June 21, Strategy held 847,363 bitcoin, acquired at a total cost of $64.10 billion, or an average of $75,651 per coin. The company's dollar reserve stood at $1.4 billion, including cash expected from yet-to-settle ATM sales. Bitcoin itself was trading around $60,817, down about 2.3%.
Strategy's bitcoin holdings far exceed those of other public companies with bitcoin treasuries. Twenty One Capital holds 43,514 bitcoin, Metaplanet has 40,177, and MARA Holdings holds 36,303.
Risks Ahead
While pausing bitcoin purchases could help stabilize sentiment, it does not eliminate the primary risk. If bitcoin rebounds, Strategy would have missed the opportunity to accumulate at lower prices. Conversely, a further decline in bitcoin could force additional share sales, diluting existing holders. CryptoQuant warned that any forced liquidation of bitcoin would "destroy shareholder value."
