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Strategy (née MicroStrategy), the software company that became the Bitcoin financial vehicle under executive chairman Michael Saylor, often feels like a corporate finance version of reality TV: loud, creepy, and addictively compelling. Ever since the company pivoted to Bitcoin accumulation in August 2020, it’s been nearly impossible to look away, and the audience has only grown in size and enthusiasm as the stock has soared more than 20x.
But lately, investors seem to be reaching out further afield.
At its peak in late 2024, the formula worked like a charm. Saylor’s prolific online activity, which includes AI-generated posts and quasi-savior-like claims about Bitcoin’s civilizational role, has stimulated a self-reinforcing feedback loop that seems too good to be true. As Bitcoin rose, so did Strategy’s stock. The rise in the stock price meant that the company could issue more shares and buy more Bitcoin at a significant premium to net asset value. These purchases caused Bitcoin to rise and stocks to rise again. For a time, it seemed as if the company had discovered El Dorado, or as others have called it, the “infinite funds glitch.”
The magic spell was broken. The stock is down about 70% from its peak in November 2024, and more importantly, it has trailed Bitcoin by a wide margin. For a company whose central proposition is to “amplify Bitcoin,” falling behind an asset it is supposed to track and outperform represents a damning indictment. That raises a fundamental question: what value does strategy add?
This week, those concerns became even clearer. Over the weekend, Thaler posted a chart of orange dots, a signature motif for Bitcoin purchases, with a teasing question: “What if we start adding green dots?” The post sparked a lot of speculation, even though nothing was written about it. The company announced Monday that it raised $1.4 billion in equity, not to buy Bitcoin, but to build reserves to cover dividends on five preferred stock classes over the next two years.
What happens if we start adding green dots? pic.twitter.com/a19bD33KzD
— Michael Saylor (@saylor) November 30, 2025
This is an amazing story development. With its stock price plummeting, Strategy decided to raise a large amount of fiat cash to weather the downturn. Still, you can understand why. The software business generates little cash, and the preferred stock comes with a hefty dollar dividend. Without the increase, Strategy would have had to sell the Bitcoin it had previously pledged to HODL.
The market did not take kindly to this, as raising money from common shareholders just to pay dividends to preferred shareholders is rarely seen as a good thing. MainFT wrote:
Strategy announced on Monday that it had created a $1.44 billion “U.S. dollar reserve” to fund dividends. The reserve is funded by proceeds from stock sales, and the Nasdaq-listed company said it aims to maintain a dollar reserve sufficient to cover “at least 12 months of dividends” and eventually expand to cover “more than 24 months” of dividends.
Strategy stock pared its intraday decline by as much as 12.2% and closed 3.3% lower on Monday. The company’s stock has fallen about 41% this year as investors question the viability of the company’s business model.
Adding to the worries was other news that Strategy’s general counsel, who had been selling large amounts of his company’s stock in recent months even as the stock price fell, was leaving the company. Although there is no suggestion there is a link between these events, the timing has created troubling views for a company already fighting to regain investor confidence.
Common shareholders currently face a double squeeze. Each time a new stock is issued, the company’s stake is diluted, but much of the money is used to cover obligations to preferred shareholders higher up in the capital structure. Meanwhile, most of Strategy’s $8 billion worth of convertible debt is trading out of the money. Now they resemble traditional debt, and the prospect of converting them into equity is increasingly remote.
A distinctive feature of Strategy’s approach is that it tends to aggressively buy Bitcoin near high prices, but has little margin to buy when it falls. The company acquired just $11.7 million in Bitcoin last week, with almost all of the $1.5 billion raised from the common stock sale going to support senior debt.
Against this backdrop, Strategy’s investor presentation on December 1st raised some eyebrows. The administrator has introduced new metrics such as “BTC Escape Speed,” “BTC Cruise Speed,” and “BTC Stall Speed.” The slide deck also included an illustration of a “digital credit vehicle,” which seems rudimentary for a publicly traded company.
Strategy’s management continues to rewrite the script. The 21/21 program, inspired by The Hitchhiker’s Guide to the Galaxy, was originally proposed as a three-year plan to acquire $42 billion in Bitcoin. The company used up the $21 billion equity portion of its shelf registration within four months. The convertible bonds were intended to take advantage of the wild swings in stock prices to fund further accumulation of Bitcoin on favorable terms. However, as large convertibles flooded the market, that volatility subsided, and the company stopped adding more cars. This was probably because there was a risk of being stuck with debt that had to be repaid from a business that generated little cash. The company made a big splash this year by launching five preferred stocks, but then had to sell them at a deep discount to liquidation value, making the cost of maintaining its dividend commitments extremely high.
All these moves keep the strategy in the headlines, but they also strain investor patience. What once seemed bold and bright now appears unstable and chaotic. The gap between rhetoric and results has become difficult to ignore, especially as stock prices have lagged far behind the assets they are supposed to track and grow.
Strategy turned corporate finance into a grand spectacle and put Thaler in the center stage. However, since the theater does not pay dividends or debt principal, the burden ultimately falls on general shareholders. The question for investors is whether there are still good reasons to own common stock.
