Strategy, Inc. (MSTR) at one point fell more than 9% on Thursday after Bitcoin fell below $60,000 and a securities investigation targeting the company was made public, hitting its lowest price since March 2024 and dropping nearly 30% in five days.
Shares in Michael Saylor’s Bitcoin treasury company reached $85 by midday Thursday, down from more than $117 earlier in the week. The stock has fallen about 36% over the past month, nearly double Bitcoin’s 18.5% decline over the same period.
In addition, the Rosen Law Firm posted a press release saying it was investigating potential securities fraud claims against Strategy, alleging that the company “may have released business information that was materially misleading to the investing public.” The study covers all five of Strategy’s publicly traded securities: MSTR, STRF, STRC, STRK, and STRD.
Legal pressures are compounding the financial strain, which analysts say stems from Strategy’s own capital structure.
The company holds 847,363 Bitcoin, the world’s largest corporate stockpile purchased at average prices, with the entire 2024, 2025, and 2026 acquisition periods currently under water. Unrealized losses on the Bitcoin portfolio amount to approximately $10.6 billion.
Strategy preferred stock malfunctions
Of more serious concern to investors is Strategy’s STRC preferred stock, which has plummeted to record lows and is currently trading at around $76, about 24% below its $100 par value. This structure is important because the strategy relies on selling preferred stock to fund ongoing Bitcoin purchases.
When preferred stock trades below par, the mechanism for raising capital ceases.
As Strategy has issued more STRCs over the past six months, its annual dividend obligation has ballooned from $300 million at the beginning of 2026 to $1.2 billion, a fourfold increase. Meanwhile, cash on hand decreased by 38% over the same period.
On-chain analytics firm CryptoQuant released a memo on June 23 urging Strategy to stop purchasing Bitcoin and rebuild its cash position to approximately $2.8 billion before resuming accumulation. The company said its dividend coverage collapsed from more than seven years to about 14 months.
Strategy appears to have gotten the message before the report arrived. During the week of June 22, the company bought just 520 Bitcoins for about $35 million, a fraction of its previous pace, and allocated $300 million of its $335.5 million common stock raise to cash on hand, increasing its cash reserves to $1.4 billion.
Saylor has not publicly commented on the study or the CryptoQuant warning.
