Strategy’s stock is down 84% from its all-time high, while its preferred shares hit a record low of $75 against a $100 par value. We break down what’s happening at Michael Saylor’s company.
Strategy is facing an investigation from the Rosen Law Firm over potential securities law violations. Against this backdrop, founder Michael Saylor broke his public silence for the first time in days, reaffirming his commitment to bitcoin and “disciplined capital allocation.”
Hot topic: Bitcoin Recovery Could Stretch Into August Even if Bottom Holds
Bitcoin critic Peter Schiff had claimed Saylor’s “financial house of cards is collapsing” and even suggested the Strategy founder would soon end up in prison. Neither scenario has materialized–yet.
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Crypto Market Pressure on Strategy: Stock Drop and Investigation
Bitcoin fell to $58,115–its lowest since September 2024–pulling Strategy’s entire capital structure down with it. MSTR has lost about 72% over the past year, while STRC, a floating-rate preferred share designed to trade near $100, hit a record low of around $75 on June 25.
At the current price, STRC’s effective yield has reached 15.3%, reflecting the high risk premium investors are demanding.
The Rosen Law Firm has opened an investigation into Strategy, examining whether executives made misleading statements related to five securities. The company has not yet issued a formal response. Several investors have expressed intent to file class-action lawsuits.
Read more: Why Is Crypto Crashing? Bitcoin Falls Below $70K After Strategy’s First BTC Sale in Four Years
Stress Test: Strategy Will Survive — But Shareholders Will Suffer
Independent analyst Adam Livingston ran a three-year stress test under an extreme scenario: a 55% bitcoin drop to $26,600, closed capital markets, and forced BTC▲$59,964.00 sales to cover obligations.
The results showed that Strategy would not go bankrupt or enter a “death spiral.” But common shareholders would lose nearly everything. CEBE would fall from 138,161 satoshis to 7,884 satoshis, and MSTR’s price would drop to $1.01.
Over three years, the company would be forced to sell 115,727 of its 847,363 BTC. By the end of the scenario, it would still hold 731,636 BTC, with bitcoin recovering to $48,500. Livingston concluded that the main risk is a temporary CEBE compression–not bankruptcy.
Learn more: Dollar-Cost Averaging Strategy Explained — How Smart Crypto Investors Build Wealth in Volatile Markets
