Strategy’s 31% valuation premium may be at risk: Fortune

Strategy’s growing preferred stock obligations and reliance on Bitcoin-backed financing have increased the risk to common shareholders, while the company’s stock continues to trade about 31% above its estimated net asset value, according to a Fortune analysis.

Fortune warned that the premium investors continue to assign to Strategy could come under pressure if Bitcoin declines further or if concerns around the company’s capital structure intensify.

Based on the publication’s estimates, Strategy holds 844,000 Bitcoin valued at roughly $51.1 billion at a Bitcoin price of $60,500. Fortune also valued the company’s software business at around $1.5 billion and noted that Strategy holds approximately $1 billion in cash, placing the estimated value of its assets at about $53.6 billion.

After accounting for roughly $6.2 billion in convertible debt and $15.5 billion in preferred stock obligations, Fortune calculated that common shareholders would be left with about $31.8 billion. Despite that figure, the company’s market capitalization stood near $41.6 billion on June 5, representing a premium of around 31% above the publication’s estimated net asset value.

Preferred stock financing raises fresh questions

Central to Fortune’s concerns is Strategy’s growing use of preferred stock to fund Bitcoin purchases.

The report noted that the company’s combined debt and preferred stock obligations have climbed from roughly $6.9 billion in early 2025 to about $21.8 billion today. Most of that increase came from preferred stock issuances that have helped finance additional Bitcoin acquisitions.

Under a scenario in which Bitcoin falls to $50,000, Fortune estimated that Strategy’s net asset value could decline to roughly $23 billion, a drop that would have a larger effect on shareholders because liabilities remain fixed while the value of Bitcoin holdings fluctuates.

Another issue highlighted in the analysis involves dilution. Since launching its Bitcoin accumulation strategy in 2020, Strategy’s outstanding share count has risen from 98 million to 353 million, according to Fortune.

Recent developments at the company have also drawn attention to how future obligations may be funded. 

As previously reported by crypto.news, Strategy shareholders recently approved a proposal to change STRC preferred stock dividend payments from a monthly schedule to semi-monthly distributions. Payments will now be made on the 15th and final day of each month.

“Paying dividends on STRC twice a month is designed to stabilize price, dampen cyclicality, drive liquidity, and grow demand for STRC, while giving STRC holders faster reinvestment opportunity.” Phong Le, President and Chief Executive Officer, said at the time.

Meanwhile, Strategy has also increased its cash reserve by $100 million, bringing total dollar reserves to $1 billion. The company also resumed Bitcoin purchases, acquiring 1,550 BTC worth approximately $101.3 million between June 1 and June 7 and lifting its total holdings to 845,256 BTC.

Those cash reserves became a point of discussion after Strategy disclosed the sale of 32 Bitcoin for roughly $2.5 million near the end of May, its first reported Bitcoin sale since December 2022.

Concerns remain

In research previously covered by crypto.news, JPMorgan said the transaction appeared largely symbolic and likely served to demonstrate flexibility toward preferred shareholders. The bank nevertheless cautioned that future dividend commitments could raise questions about funding if reserves are depleted.

Fortune expressed a similar concern, arguing that annual preferred stock dividend obligations now total about $1.5 billion. According to the publication, continued reliance on new preferred stock issuances to meet those commitments could place additional pressure on the company’s financial structure.

Not all observers agree that Strategy faces significant risk. Following JPMorgan’s report, BTCTOP CEO Jiang Zhuoer argued that the company’s leverage would remain manageable even if Bitcoin dropped to $30,000. 

Jiang also said large Bitcoin sales would undermine Strategy’s identity as a long-term holder and suggested the company could use older low-cost holdings to meet obligations while continuing to accumulate Bitcoin through new capital raises.