Fortune: MicroStrategy may sell BTC amid preferred stock dividend pressure

MicroStrategy's Bitcoin accumulation model is being tested, and the company may have to sell some of its BTC holdings due to the growing burden of preferred stock dividends, Fortune reported. According to the analysis, MicroStrategy currently holds approximately 844,000 BTC. Assuming a price of $65,000 per BTC, these holdings are valued at around $51.1 billion. The company's total assets, including its software business and cash equivalents, are estimated at about $53.6 billion. After subtracting liabilities such as $6.7 billion in convertible notes and $15.5 billion in preferred stock, the net asset value attributable to common shareholders is calculated to be around $31.8 billion. Despite this, MicroStrategy's market capitalization was approximately $41.6 billion as of June 5, representing a premium of about $10 billion over its net asset value (NAV). Fortune noted that while the market has historically awarded a premium to CEO Michael Saylor's "Bitcoin Appreciation Flywheel" strategy, the recent price correction in BTC increases the risk of this premium shrinking. If BTC's price were to fall to $50,000, MicroStrategy's NAV could decrease to about $23 billion. If the market premium were to disappear entirely, the company's stock could face even greater downward pressure than Bitcoin itself. To fund future preferred stock dividends, MicroStrategy might resort to issuing additional preferred shares or selling a portion of its BTC. This could expose the company to a potential "death spiral," a vicious cycle where issuing new stock to pay dividends necessitates further financing, progressively worsening its financial structure.