Analyst warns $15 billion preferred stock dividend obligations may outstrip cash reserves within months amid Bitcoin price decline.
MicroStrategy’s aggressive Bitcoin-backed financing model is under strain as its $1.5 billion annual dividend obligations collide with a shrinking cash buffer. The company holds $15 billion in preferred stock, relying on Bitcoin appreciation to fund payouts, but BTC’s recent dip to near $73,400 has upended that calculus.
After raising $2 billion via stock sales, MicroStrategy repurchased $1.38 billion of its 2029 convertible notes at an 8% discount, reducing its bond stack from $8.2 billion to $6.7 billion. The move left just $871 million in cash, barely covering two years of dividends, according to a recent analysis.
The warning highlights risks in the company’s strategy, which assumes uninterrupted Bitcoin rallies to sustain its capital structure. With liquidity tightening, stakeholders may face losses if BTC fails to rebound swiftly.