A dramatic capital-raising move has sent shockwaves through Strategy’s investor base, triggering a severe crisis of confidence in what was once a celebrated cryptocurrency stock. The company’s announcement of a massive preferred share issue, designed to fuel further Bitcoin acquisitions, is brutally diluting existing shareholders and raising existential questions about its future.
A Costly Pursuit of Bitcoin
In a move that stunned markets, Strategy unveiled plans for a substantial issuance of 7.75 million preferred shares, priced at €80 each. This initiative is set to inject €620 million into the company’s coffers. The capital comes with a significant string attached for current investors: their holdings face substantial dilution. The newly issued shares promise an attractive 10 percent dividend, payable quarterly. All proceeds are earmarked for purchasing additional Bitcoin and for general corporate purposes, a strategy that is proving difficult for the existing shareholder base to swallow.
Advertisement:
Amid the discussion surrounding Strategy’s substantial Bitcoin holdings — a complimentary webinar compares Gold and Bitcoin, outlining opportunities, risks, and aiding portfolio allocation decisions. Watch Free Webinar Now: Gold vs. Bitcoin**
Should investors sell immediately? Or is it worth buying Strategy?
Technical Chart Breakdown Accelerates
The technical outlook for the share price has deteriorated sharply. Key support levels that had held firm for months, situated between €250 and €260, have now been decisively broken. The downward trend is gathering pace, accompanied by a surge in trading volumes—a clear indicator that both institutional and retail investors are heading for the exits. Furthermore, an RSI reading exceeding 84 signals that the stock is technically in deeply oversold territory. Despite this, all current indicators point toward continued losses rather than a potential recovery.
The Burden of a Single-Asset Strategy
On the surface, Strategy’s fundamental metrics appear robust. The company possesses the world’s largest corporate treasury of Bitcoin, holding 641,205 coins—a treasure trove valued at approximately $64.5 billion. For the third quarter of 2025, it reported an operating profit of $3.9 billion. However, this very focus on Bitcoin is becoming a liability. The aggressive policy of continuously buying more cryptocurrency, financed through expensive capital increases, is driving the company’s debt levels higher. With leverage already at 13 percent and more share emissions planned, serious doubts are emerging about the long-term sustainability of this business model.
The Demise of a Premium Valuation
The core issue is the evaporation of Strategy’s once-substantial market premium. Shares that previously traded at up to eight times their underlying Bitcoin value now command almost no premium at all. The market is penalizing the company for its opaque financing tactics and the increasing complexity of its corporate framework. The critical question remains: can Strategy engineer a successful turnaround, or has the decline of this former crypto star become an irreversible descent?
Ad
Strategy Stock: Buy or Sell?! New Strategy Analysis from November 8 delivers the answer:
The latest Strategy figures speak for themselves: Urgent action needed for Strategy investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from November 8.
Strategy: Buy or sell? Read more here...
