💬Opinion: Strategy's preferred equity debt reaches up to $15 billion, facing pressure to sell BTC

On May 29, Arca Chief Investment Officer Jeff Dorman stated that Strategy's current approximately $15 billion preferred equity financing structure has become "out of control." He pointed out that these preferred shares require about $1.5 billion in dividends annually, and with Bitcoin prices continuously fluctuating, this structure is becoming increasingly difficult to sustain. Strategy's financing model is based on the premise that "BTC will continue to rise significantly." Although the company previously alleviated short-term default risk through issuing additional shares, its decision to buy back bonds maturing in 2029 is perplexing.
He said that ultimately, Strategy may have only two options: sell BTC to pay preferred dividends, or stop paying dividends, both of which would have a significant impact on the company and investors. Meanwhile, Strategy CEO Phong Le told CNBC that the company "may sell Bitcoin" at some point in the future, but overall will continue to increase BTC holdings and raise the amount of BTC per share.
Polymarket data shows that the market's probability of Strategy selling some BTC before the end of 2026 has risen to about 90%.📊As of now, Strategy holds a total of 843,738 BTC, with a total cost of approximately $63.87 billion, and an average purchase price of about $75,700.