An overnight plunge in Bitcoin prices combined with undigestible funding sent Strategy (MSTR) shares plunging 12.5% in early U.S. trading on Monday to their lowest level in nearly 15 months.
However, despite Bitcoin price not rebounding MSTR held near intraday lows of around $85,000 throughout the day, erasing almost all of its losses and closing down “only” 3.25%.
Until proven otherwise, this action appears to be nothing more than short covering by well-fed bears. As of Monday, Strategy’s lowest price was $155.61, and the stock has fallen nearly 40% in the past month and is down 66% from its 2025 high hit in mid-July. Any short seller not covering their shorts at this time is definitely doing something wrong.
king dollar
Facing pressure from critics and investors over Strategy’s ability to fund preferred stock dividends, Michael Saylor and team announced earlier Monday that the company had sold common stock over the past few weeks to raise $1.44 billion in reserves to pay preferred stock dividends over the next 21 months. The company’s goal is to eventually have enough cash reserves to cover dividends for at least 24 months.
It’s a stunning turn of events for the preeminent Bitcoin finance company, but the plunge in Bitcoin prices, coupled with the company’s plummeting market valuation relative to its Bitcoin holdings, may leave it with no choice if it doesn’t want to start liquidating its massive Bitcoin stack (650,000 Bitcoins at last check).
Investors weren’t too happy with the potential dilution of the new strategy, with common stock investors selling heavily on the news, sending MSTR down about 12.5% on Monday.
Coinless enthusiast and gold aficionado Peter Schiff saw the news as an opportunity to build some hype.
“So Strategy’s new business model is to sell stock to raise cash and then use that cash to buy Treasury bonds yielding about 4% to fund debt and preferred equity issuances at a cost of 8% to 10%,” he said. “How long are investors going to continue to pretend it’s a viable business just to bet on Bitcoin?”
“Today is the beginning of the end of strategy,” Schiff continued. “Thaylor was forced to sell stock, not to buy Bitcoin, but to buy dollars, just to fund Strategy’s interest and dividend obligations. The stock is broken. The business model is a scam, and Michael Thaler is Wall Street’s biggest liar.”
Whether today’s reversal signals a bottom for troubled Strategy stock remains to be seen. However, battered strategy (and Bitcoin) bulls may take some comfort from the dozens of times Peter Schiff has triumphed over the industry’s difficulties, only to see the situation completely reverse within weeks or months.
