Summary
- Strategy still has the U.S. dollar reserves to comfortably meet its dividend obligations for almost 10 months. The current price doesn’t put those payments at risk.
- MSTR fell 8% to $86 on Thursday, its lowest level since February 2024, while STRC dropped to $75, trading at a 25% discount to its intended $100 par value.
- CEO of Two Prime, Alexander Blume, said repeated changes in Strategy’s plans, combined with the weak performance of MSTR and STRC, have undermined trust among retail investors.
Investor Confidence Wanes as Strategy’s Stock Falls
Concerns about Strategy’s ability to meet dividend obligations have sent its stock plummeting 8% to $86, but the company still has a 10-month cash runway to cover its dividend payments. The bigger issue at hand is the impact this has had on investor confidence. As the stock continues to fall, investors are losing faith in the company’s ability to bounce back.
The company’s treasury, which holds a significant amount of bitcoin, still has sufficient dollar reserves to cover dividend obligations for nearly a year. However, the perpetual preferred stock has collapsed to $75, a 25% discount to its par value. This has led to a compression of the company’s enterprise multiple to net asset value, now sitting at just 1.05.
Affecting Earning and Passive Income
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