TLDR

Strategy (formerly MicroStrategy) plans to raise $21 billion via preferred stock to purchase more Bitcoin
The stock dropped 16.68% on Monday, March 10, 2025, amid broader crypto market weakness
The company already holds approximately 500,000 bitcoins worth around $40 billion
President Trump’s executive order creating a “Strategic Bitcoin Reserve” disappointed investors
Strategy has not purchased Bitcoin for two consecutive weeks

Shares of Strategy, the company formerly known as MicroStrategy, fell sharply on Monday, March 10, 2025. The stock closed down 16.68% at $239.27 per share as investors reacted to the company’s plans for a massive capital raise.

Strategy announced it intends to raise up to $21 billion through what it calls “perpetual strike preferred stock.” These shares would have no expiration date and offer an 8% dividend to investors.

MicroStrategy Incorporated (MSTR)

The company plans to use the proceeds to add to its already substantial Bitcoin holdings. Strategy currently owns nearly 500,000 bitcoins, valued at approximately $40 billion.

Monday’s decline continues a pattern for the stock. Strategy shares have now fallen on four consecutive Mondays, often in response to Bitcoin price movements that occur over the weekend.

Bitcoin was trading at around $82,400 early Monday, down about 1.5% over the previous 24 hours. This represents a substantial drop from Friday, when the cryptocurrency briefly traded above $90,000.

The decline in Bitcoin prices came despite President Donald Trump hosting the first White House crypto summit. During the event, Trump signed an executive order establishing a “Strategic Bitcoin Reserve.”

However, investors were disappointed to learn that this reserve would consist of already seized crypto assets. The government has no plans to purchase additional Bitcoin on the open market, as many crypto enthusiasts had hoped.

Strategy’s volatility has been remarkable in recent weeks. The stock has moved more than 5% in either direction on all but two trading days over the past two weeks.

In its Monday update, Strategy revealed it had not purchased any Bitcoin during the week of March 3 to March 9. This marks the second consecutive week without Bitcoin acquisitions by the company.

Crypto Stocks Fall

The broader crypto-related stock sector also suffered on Monday. Cryptocurrency exchange Coinbase fell 17.58%, while trading platform Robinhood dropped 19.79%.

Strategy’s core business intelligence and software operations have shown little growth. The company now functions primarily as a vehicle for Bitcoin investment.

The latest move to double its Bitcoin reserves using preferred shares raises concerns about dilution for existing shareholders. The company will also need to pay substantial dividends on these new shares, even as it operates at a loss.

Strategy’s current market capitalization is approximately $62 billion. The stock price reflects its high-risk, high-reward strategy of tying company fortunes directly to Bitcoin.

Investors closely monitor Strategy’s weekly Bitcoin purchase reports. The company’s Monday filings have become important events for both crypto and traditional markets.

The preferred stock offering will give investors an option to convert their shares into regular common stock at any time. This feature adds another layer of complexity to Strategy’s capital structure.

Strategy’s business model now depends almost entirely on the performance of Bitcoin. The company has transformed from a software business to what many analysts describe as a leveraged Bitcoin fund.

The post Strategy (MSTR) Stock: Shares Sink 16% Following New Cryptocurrency Acquisition Plan appeared first on CoinCentral.

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Filed under: News - @ March 11, 2025 11:32 am