Michael Saylor’s Strategy ($MSTR) has officially surpassed the 700,000 BTC milestone, but the massive purchase has failed to stop the company’s stock from sliding. Despite acquiring 22,305 additional Bitcoin (BTC-USD) for $2.13 billion last week, Strategy’s shares fell nearly 7% in early trading on Tuesday. This downward trend continues a difficult year for the firm, which has seen its stock price plummet over 60% from its peak as investors grow increasingly wary of the company’s aggressive use of debt and share dilution.
Why Strategy Stock Is Dropping
The primary reason Strategy’s stock is falling despite the big purchase is the heavy cost of the money used to buy the Bitcoin. To pay for the 22,305 BTC, the company issued millions of new common shares and preferred stock. While this adds more Bitcoin to the treasury, it also dilutes the value for existing shareholders.
Analysts at TD Cowen recently lowered their price target for the stock to $440, citing a “weaker outlook for Bitcoin yield” because so much new equity is being issued. This dilution means that even though the company owns more total Bitcoin, each individual share of the company actually represents a smaller slice of those holdings than it used to.
Investors Are Nervous about Strategy’s Debt Obligations
Some investors are also nervous about the company’s $21 billion in debt and payments owed to preferred shareholders. There is a growing fear on Wall Street that if the price of Bitcoin drops too far, Strategy might be forced to sell some of its coins to pay its bills. While the company has created a $1.4 billion cash reserve to prevent this, many traders are still worried about a “doom loop” where falling prices lead to forced selling.
The Saylor Premium Is Eroding
For years, investors were willing to pay a massive premium to own Strategy stock as a way to bet on Bitcoin. This premium has now largely vanished.
- Institutional Selling: Major firms like Vanguard and BlackRock ($BLK) have recently reduced their holdings in Strategy.
- ETF Competition: With more people buying spot Bitcoin ETFs, there is less demand for Strategy’s stock as a proxy for the digital asset.
- Valuation Shift: The company’s multiplier, the amount investors pay above the actual value of its Bitcoin, has fallen from a peak of 2.4x to around 1.1x in early 2026.
Key Takeaway
Essentially, Michael Saylor is still all-in on Bitcoin, but the stock market is starting to get nervous about the bill. Even though the company now owns an incredible amount of digital gold, it had to print a lot of new shares and take on a lot of debt to get there. Investors are now more worried about that debt and dilution than they are excited about the new Bitcoin. It’s like a homeowner who buys a second house—the property is valuable, but if the mortgage is too big, the owner’s net worth might actually feel lower because of the extra risk.
Is Strategy a Good Stock to Buy?
Currently, Wall Street has a Strong Buy consensus rating on Strategy stock based on 11 Buys, two Holds, and no Sell recommendations. The average MSTR stock price target of $440.82 indicates 154% upside potential.
