An overnight drop in the price of bitcoin combined with a hard-to-digest capital raising to send Strategy ( MSTR ) shares down 12.5% to their weakest level in nearly 15 months in US morning trading on Monday.
And yet, despite no rejection in the price of bitcoin – which remained close to session lows of around $85,000 for the day – MSTR managed to almost erase all its losses, ending lower by “only” 3.25%.
Until proven otherwise, the action appears to be only short-covering by fully fed bears. At the Strategy’s weakest level on Monday at $155.61, the stock was down nearly 40% over the past month and 66% from its 2025 high hit in mid-July. Any bears that don’t cover their shorts at that point are definitely in the wrong business.
King dollar
Facing pressure from critics and investors about Strategy’s ability to fund preferred stock dividends, Michael Saylor and team announced early Monday that the company had spent the past few weeks selling common stock to raise a $1.44 billion reserve to pay preferred dividends for the next 21 months. In the long term, the company’s goal is to have enough cash in reserve to pay dividends for a minimum of 24 months.
It was a startling turnaround for the prominent bitcoin tax company, but falling bitcoin prices combined with a collapse in the company’s market value relative to its bitcoin holdings likely left it with no choice but to start liquidating its massive BTC stack (650,000 coins at last check).
No one was particularly happy about the potential dilutive effects of this new strategy, investors in the common stock sold off heavily on the news, sending MSTR down about 12.5% in Monday’s action.
No-coiner and gold rusher Peter Schiff took the news as an opportunity to pile on.
“So Strategy’s new business model is to sell shares to raise cash and then use that cash to buy government bonds yielding around 4% to finance the issuance of debt and preferred shares at a cost of 8%-10%,” he said. “How long will investors pretend this is a viable business just to gamble on Bitcoin?”
“Today is the beginning of the end of strategy,” Schiff continued. “Saylor was forced to sell shares not to buy Bitcoin, but to buy US dollars simply to fund Strategy’s interest and dividend obligations. The stock is broken. The business model is a fraud and Michael Saylor is the biggest fraud on Wall Street.”
Whether today’s turnaround marks a bottom for the struggling shares in Strategi remains to be seen. Battered Strategy (and bitcoin) bulls, however, can take solace from the dozens of other times Peter Schiff has taken a victory lap amid the sector’s difficulties, only to see the situation completely reverse within weeks or months.
