Strategy Shares Crash as Bitcoin Slide, SEC Pressure and Cash Concerns Shake Investor Confidence

Shares of Strategy Inc. (MSTR) suffered another sharp decline on Thursday, extending a brutal sell-off that has wiped out nearly 30% of the company’s market value in just five trading sessions. The drop pushed the Bitcoin-focused firm’s stock to its lowest level since March 2024 as a combination of Bitcoin weakness, legal scrutiny, and growing balance sheet concerns weighed on investors.

The company’s shares briefly fell below $85 during Thursday’s session, down from more than $117 earlier in the week. Over the past month, Strategy stock has dropped around 36%, significantly underperforming Bitcoin, which has declined roughly 18.5% during the same period.

Adding to the pressure, law firm Rosen Law Firm announced an investigation into potential securities fraud claims involving Strategy. The firm said it is reviewing whether the company may have provided misleading information to investors, with the investigation covering all of Strategy’s publicly traded securities, including MSTR and its preferred stock offerings.

The legal concerns arrive as investors increasingly focus on the risks tied to Strategy’s Bitcoin-heavy financial model. The company currently holds 847,363 BTC, making it the largest corporate Bitcoin holder globally. However, recent purchases made during higher price levels have moved into unrealized losses, with the company’s Bitcoin holdings now facing billions in paper losses.

A major concern has emerged around Strategy’s preferred stock market, particularly STRC, which has fallen to record lows. The preferred shares are trading near $76, far below their $100 value, raising questions about investor confidence in the company’s financing strategy.

Strategy has used preferred stock sales as a key tool to fund additional Bitcoin purchases, but the approach has increased its financial obligations. Annual dividend commitments reportedly climbed from about $300 million at the beginning of 2026 to nearly $1.2 billion, while the company’s cash reserves declined significantly.

Crypto market analysts have warned that Strategy may need to slow its Bitcoin buying strategy and focus on strengthening liquidity. CryptoQuant recommended that the company rebuild its cash reserves before continuing aggressive accumulation, citing a sharp decline in dividend coverage.

The company appears to have already reduced its buying pace. During the week of June 22, Strategy acquired only 520 Bitcoin worth approximately $35 million, a major slowdown compared with previous purchases. It also directed most of a recent $335.5 million stock offering toward its cash reserves, increasing available liquidity to about $1.4 billion.

Strategy executive chairman Michael Saylor has not publicly addressed the investigation or the growing concerns surrounding the company’s capital structure, leaving investors watching closely for the company’s next move.