Strategy May Sell Billions in Bitcoin and Stock to Stabilize STRC
- Strategy’s STRC preferred stock fell to $82.53 on June 18, closing at $88.59, below its $100 par value.
- Jeff Dorman estimates a 70% chance that Strategy will continue selling small amounts of MSTR stock monthly.
- Dorman assigns a 25% probability to the option of selling $3 billion to $4 billion worth of Bitcoin to stabilize STRC.
- The potential sale could result in a “30-40 cents on the dollar” return for preferred shares and address a $1.7 billion annual cash outlay issue.
- Dorman values Strategy’s unencumbered Bitcoin collateral at approximately $35.2 billion with an equity market cap of about $40.4 billion.
Dorman’s analysis highlights significant pressures on Strategy’s capital structure, suggesting that without substantial asset sales, the company risks further declines in its stock and preferred shares.
The need for action is underscored by the current trading status of STRC, which remains far from its par value, indicating urgent financial challenges for Strategy as it navigates these pressures. (Source)
