The Strategy/bitcoin trade isn’t looking nearly as good these days.
Strategy Inc. (Nasdaq: MSTR) has established a USD Reserve of $1.44 billion, a move designed to stabilize dividend obligations and mitigate pressure to liquidate its Bitcoin treasury. The reserve was funded through the sale of Class A shares under the company’s at-the-market offering program.
This financial buffer coincides with an important market divergence. The company’s stock is now trading below the net value of its Bitcoin holdings for the first time in years.
With 650,000 BTC — approximately 3.1% of Bitcoin’s total supply — Strategy’s Bitcoin holding is valued near $55 billion. After accounting for $8.2 billion in debt, the net Bitcoin value stands at roughly $46.8 billion, which exceeds the company’s current market capitalization of about $45 billion.
Reserve intended as a dividend stabilizer
The primary function of the new reserve is to fund dividend payments across preferred stock, debt, and common equity.
According to CEO Phong Le, the reserve is structured to cover a minimum of 12 months of dividends, with the objective of extending that coverage to 24 months.
Le later clarified that the existing reserve already secures approximately 21 months of dividend payments.
Executive Chairman Michael Saylor characterized the reserve as a stabilizing mechanism for investors seeking predictable income independent of Bitcoin’s volatility.
He emphasized that the company does not intend to sell Bitcoin to finance dividends but retains the option to do so if necessary.
That contingency is linked to Strategy’s market-adjusted net asset value (essentially the market value of its Bitcoin holdings, also known as mNAV). Should the stock price fall persistently below the value of its Bitcoin holdings — the specific condition Saylor cited — and equity raises become impractical, the company is prepared to sell BTC or related instruments.
This scenario would be represented by an mNAV falling below 1.0, the point at which the stock price would fully discount the underlying Bitcoin value per share. As of the latest reporting, Strategy’s mNAV is 1.15, remaining above that theoretical trigger point.
Market reaction and revised outlook
Despite the mNAV buffer, the market reaction was pronounced. MSTR shares fell approximately 12% on the day of the announcement and have declined about 57% since October 6, underscoring the growing disconnect between its share price and underlying asset value.
Concurrently with the reserve announcement, Strategy provided a sober revision of its 2025 financial targets, citing weaker market conditions and revised Bitcoin assumptions. The updated expectations are as follows:
- BTC yield: 22–26% (down from earlier targets)
- BTC price assumption: $85,000–$110,000 by year-end
- Targeted BTC gains: Reduced from $20B to $8.4B–$12.8B
- Operating income: Lowered from $34B to $7B–$9.5B
The revised outlook illustrates a company navigating its dual identity as an operating business and the largest institutional Bitcoin holder.
Future decisions regarding Bitcoin acquisitions, according to Saylor, will be governed by mNAV levels, equity market conditions, and the longevity of the new dividend reserve.
Separately, the company confirmed a modest addition of 130 BTC (worth approximately $11.7 million), bringing its total holdings to the symbolic milestone of 650,000 coins.
On the bright side, the crypto market bounced upwards at the time this article was published, and Strategy received a healthy 8% boost to its share price.
