MSTR stock: Strategy’s premium nearly gone as Bitcoin rally falters

January 6, 2026

StrategyMSTR, which at times has sported a value that’s more than double its bitcoin holdings, has essentially lost that entire premium, which will make it much harder to make further cryptocurrency purchases. The loss of its premium also counters Strategy’s argument for continued inclusion in MSCI indexes ahead of an expected decision on Jan. 15.

On Tuesday, as the bitcoin price retreated close to $92,000, falling 1.9% over the 24-hour period, MSTR stock sank 4.1%. According to Strategy’s own metrics, the company carries an enterprise value of $63.3 billion, barely 1% more than the $62.3 billion value of its bitcoin holdings.

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Strategy Loses Bitcoin Buying Power

Here’s why the 66% plunge in MSTR stock from its 52-week high has seriously hampered Strategy’s ability to continue buying bitcoin. Keep in mind that Strategy’s plan has been to steadily increase bitcoin per share.

That supports Strategy’s investment case that MSTR stock provides investors with high-beta exposure to bitcoin. The idea is that it can rise faster than the cryptocurrency when the bitcoin price appreciates, though fall faster when it depreciates.

If Strategy increases its bitcoin holding by 1%, increasing its share count by more than 1% would dilute bitcoin per share. The problem is that Strategy, with its depressed share price, would have to issue just over 4 million shares, or nearly 1.2%, to increase its bitcoin holdings by 1%.

The upshot is that further bitcoin purchases will dilute bitcoin per share, or else Strategy will have to cover a significant portion of the purchase price by issuing more preferred stock with a roughly 11% interest rate.

Strategy Builds Cash Reserve

Yet Strategy has shied away from preferred-stock issuance since investors began to question its ability to meet its financial obligations, including $831 million a year in interest costs. Given Strategy’s hefty bitcoin stash, covering those payments should present little concern in the intermediate term under even quite negative scenarios.

However, Strategy recently raised $2.25 billion in cash via MSTR stock sales to provide assurance to investors that it won’t face a cash crunch and be forced to sell shares or bitcoin at fire-sale prices.

Still, Strategy convertible bond holders could demand early repayment on up to $6.6 billion in low- or zero-interest loans in 2027 and 2028 if they remain well below the conversion price.

MSCI Decision On Bitcoin-Holding Firms

Strategy argued in a letter to MSCI that investors have given the company a substantial premium to the value of its bitcoin holdings because of confidence in management. That premium, according to Executive Chairman Michael Saylor and CEO Phong Le, indicates that Strategy is much more than a passive fund that holds bitcoin.

Saylor has said that Strategy has positioned itself to be the leading digital credit company, providing high-interest financial products backed by bitcoin. Strategy’s financial products are its preferred shares, which have a variety of different terms but generally all provide interest payments of 10% or more.

The math only works for both common and preferred shareholders if bitcoin rises much more than 10% a year.

Be sure to read IBD’s The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.

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