Strategy’s $21 Billion Bitcoin Play: Saylor’s Firm Faces 30% Stock Plunge Amid Market Fears
Strategy (NASDAQ: MSTR), formerly MicroStrategy, has seen its shares plummet by 30% since its executive chairman Michael Saylor was featured on the cover of Forbes magazine. The decline, which began on January 30 when shares traded at $340.09, has continued through March 10, with the stock closing at $238.25.
Market Turbulence Hits Bitcoin Proxy, Strategy Shares Tumble 30%
Under more general market concerns, the Bitcoin treasury company saw a particularly sharp decline of 17% on March 10. With the Atlanta Fed projecting negative GDP growth of -2.4% for Q1 2025, the sell-off came as the Nasdaq Composite dropped over 4% on the same day as fresh recession worries seized.
Strategy is unwavering in its Bitcoin purchase approach despite the volatility in this market. The firm declared on March 10 intentions to sell 8% series A perpetual-strike preferred stock, therefore generating up to $21 billion. The company’s press announcement states that “general corporate purposes, including the acquisition of Bitcoin and for working capital,” will be the usage for the funds.
Under a “at—-market” (ATM) program, the corporation will be able to issue shares over an extended time contingent on market conditions. This strategy follows a successful sale in January, in which Strategy raised $563 million by selling preferred shares at $80 each.
Strategy’s Bitcoin Holdings Still Profitable Despite Recent Volatility
Strategy currently holds approximately 499,096 Bitcoin, valued at around $42 billion. Despite Bitcoin recording its largest weekly decline in history on March 10, Strategy’s Bitcoin investment remains profitable by 18.9%. The company has purchased its Bitcoin BTC/USD at an average cost of $66,423, which is still below the current trading price of approximately $80,000.
The financial scene has responded differently to the company’s Bitcoin approach. Although some see Strategy’s method as a clever move that takes advantage of Bitcoin’s amazing 15-year growth trajectory, many have voiced worries regarding the sustainability of its strategy.
Writing on X (formerly Twitter), market analyst Hedgex.eth earlier referred to Strategy’s method as a Ponzi scheme, noting that Saylor “will do more damage to Bitcoin than anyone else using endless leverage.” Likewise, investor Haralabos Voulgaris speculated that “the next ‘unexpected’ BTC implosion will probably be tied to MSTR.”
Preferred Stock Yields Nearly 9.5% After Sell-Off
The revelation of Strategy’s $21 billion stock issuing schedule has strained its current preferred securities. Trading under the symbol STRK, the company’s convertible preferred shares dropped 8.1% to $85 on Monday, therefore lowering its yield to roughly 9.4%.
With yields in the 6% level, many bank and other preferred securities now offer, this yield greatly surpasses. The high yield reflects investor worries over Strategy’s lack of conventional dividend earning protection, which would equal roughly $60 million yearly at current levels.
Should Strategy issue the whole $21 billion in preferred stock, its yearly dividend load might approach $2 billion. Given the company’s lack of conventional income, this likelihood has disturbed investors. On GAAP, the company’s software division is not profitable; its Bitcoin assets produce no direct yield either.
MSTR Technical Analysis Points to Critical Support Levels
Technical analysts are closely watching Strategy’s stock price, which is currently testing a three-month support level around $288. A break below this level could potentially lead to further declines toward $248, $208, and possibly as low as $135.26.
Such a collapse could have significant implications for Bitcoin. Given Strategy’s position as the largest corporate Bitcoin holder, a forced selling scenario could put downward pressure on the cryptocurrency market. Bitcoin recently failed to hold its recovery target of $94,204 and lost the crucial $90,320 level, trading around $81,900 as of March 9.
Key levels to watch for Bitcoin include $75,884 as the next major support, followed by the $72,000-$70,000 psychological demand zone, and ultimately the $65,000-$60,000 range if panic selling intensifies.
Strategy’s Long-Term Vision Remains Unchanged
Strategy keeps positioned as “the world’s first and largest Bitcoin Treasury Company,” despite the recent turmoil. According to its news statement, the company’s treasury approach “designs to provide investors varying degrees of economic exposure to Bitcoin by offering a range of securities, including equity and fixed-income instruments.”
Though its strategic focus has obviously turned toward Bitcoin accumulation, the company also keeps running its AI-powered enterprise analytics software business. Strategy thinks its “combining of operational excellence, strategic Bitcoin reserve, and focus on technological innovation positions us as a leader in both the digital asset and enterprise analytics sectors.”
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