MicroStrategy (MSTR) shares fell over 5% as market scrutiny of its leveraged strategy intensified.
The company's Series A perpetual preferred stock (STRC) hit a record low of $89. This price sits significantly below the $100 par value required to fund further Bitcoin acquisitions. The decline effectively halts the company’s primary mechanism for purchasing Bitcoin, which relies on selling STRC shares at or above par.
Analysts warn of a potential vicious cycle where the company may be forced to sell Bitcoin to cover dividend payments. MicroStrategy sold 32 BTC in late May to fund dividends. This transaction marked the company's first Bitcoin sale since 2022. The development raises concerns regarding the company's cash reserves and potential pressure on Bitcoin's price.