Strategy Shares Dive on Capital Raise Before Powerful Rebound
Strategy (MSTR) endured a volatile session Monday after revealing it had raised $1.44 billion through common stock sales to build a reserve for nearly two years of preferred dividend payments. The disclosure — paired with an overnight crash in bitcoin — sent the stock plunging 12.5% to its lowest level in almost 15 months during early U.S. trading.
Bitcoin remained pinned near its session bottom around $85,000 all day, yet Strategy staged a sharp rebound into the close. MSTR ultimately finished down just 3.25%, a dramatic recovery widely attributed to short-covering. At its intraday low of $155.61, the stock was down nearly 40% over the past month and 66% from its mid-July 2025 high, levels that made remaining short positions increasingly untenable.
Under scrutiny from investors questioning its ability to meet preferred dividend obligations, the company confirmed it had quietly issued new common shares in recent weeks to amass the $1.44 billion dividend reserve. Management aims to extend that buffer to at least 24 months. With bitcoin sliding and Strategy’s market value falling relative to its roughly 650,000 BTC stash, the move signaled an effort to avoid selling core holdings.
The capital raise triggered heavy selling from common shareholders concerned about dilution, fueling the initial 12.5% drop before the late-session reversal.
The announcement also drew criticism from outspoken bitcoin opponent and gold advocate Peter Schiff, who used the moment to renew his attacks on Strategy’s model.
“Strategy is now selling stock to raise cash, buying Treasuries yielding 4%, and using that to cover debt and preferred dividends costing 8%–10%,” Schiff said. “How long will investors pretend this is viable just to speculate on Bitcoin?”
He added: “This marks the beginning of the end. Saylor had to sell stock not to buy Bitcoin, but simply to raise dollars for interest and dividend obligations. The stock is broken, the business model is fraudulent, and Saylor is the biggest con man on Wall Street.”
Whether Monday’s recovery will prove a sustainable turning point remains uncertain. Still, bitcoin and Strategy supporters may point to the past: Schiff has often celebrated during periods of sector stress — moments that historically preceded major reversals.
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