MSTR Falls Nearly 3% as Strategy Signals Possible Bitcoin Sales

In an 8-K filing – a required report companies submit to the US Securities and Exchange Commission (SEC) when a significant event occurs – Strategy said it agreed to buy back about $1.5bn worth of its 0% convertible senior notes due 2029. These are a type of debt that pays no interest but can later be converted into company shares. The repurchase will cost an estimated $1.38bn in cash through private transactions with note holders. The final price could still adjust, based partly on the average price of Strategy shares during the period.

The company said it may fund the buyback using cash reserves, stock sales through its at-the-market (ATM) programme – a facility that allows firms to issue new shares gradually into the open market over time, which carries dilution risks for existing shareholders by increasing the total number of shares outstanding and potentially reducing the value of each share – and/or proceeds from selling Bitcoin.

Investor concerns rise

The announcement that Bitcoin sales could help finance the deal may unsettle some investors, who see Strategy as a leveraged proxy for long-term Bitcoin exposure rather than a traditional software business. The market has long priced MSTR at a premium to its net asset value (NAV) – the total value of the company's assets minus its liabilities per share – reflecting enthusiasm for the company's role as a de-facto Bitcoin holding company with significant leverage through debt and equity raises.

Bitcoin itself was down 2.4% on the day, according to CoinGecko data. Selling BTC while the company still sits on substantial unrealized gains – paper profits that have not yet been locked in by selling the asset – with an average purchase price around $75,538 may signal the first cracks in its long-standing "Bitcoin-first" treasury strategy. This move raises questions about potential conflicts between nurturing its modest software business fundamentals and maintaining its aggressive crypto treasury playbook.

Strategy said the repurchases are expected to settle on or about 19 May. Following the closing, around $1.5bn aggregate principal amount of the 2029 notes will remain outstanding.

Strategy's Bitcoin treasury

Strategy remains the world’s largest corporate holder of Bitcoin, with 818,869 BTC worth about $64.7bn at current prices, according to CoinGecko treasury data. The company’s average purchase price stands around $75,538 per Bitcoin, giving it an unrealized profit of nearly $3bn despite the recent market pullback. Its holdings represent almost 4% of Bitcoin’s total circulating supply – the amount of BTC available in the market.

The latest filing comes just over a week after Strategy reported a $12.5bn net loss for the first quarter of 2026, driven largely by a $14.5bn unrealized loss from Bitcoin price swings. The token is down nearly 10% year-to-date. Revenue came in at $120.7mn, missing analyst forecasts of around $125mn.

Despite the quarterly loss, Strategy continued its aggressive Bitcoin accumulation during Q1. The company said last week it had raised $11.7bn so far this year to fund BTC purchases, including $5.6bn through its STRC preferred stock offering. Preferred stock is a special class of shares that typically gives holders priority for dividends and assets in a liquidation. Bitcoin holdings grew 22% year-to-date.

"STRC has scaled to $8.5bn in just nine months and is now the largest preferred stock by market cap in the world," said Michael Saylor, founder and executive chair of Strategy. "By extracting Bitcoin's performance and engineering price stability, we have produced a credit instrument with a 2.53 Sharpe ratio – a measure that shows how much return an investment generates per unit of risk taken. This has sparked a broader Digital Credit ecosystem, with $150mn of STRC held in corporate treasuries."

Market reactions, comparisons

Market reaction echoed past instances where corporate Bitcoin treasury moves triggered volatility. Unlike some other Bitcoin-holding firms that have sold holdings during downturns to preserve liquidity, Strategy has historically prioritized accumulation. TD Cowen analysts, who maintain a Buy rating on the stock, have reframed such flexible treasury policies positively as a sign of strategic agility rather than weakness.

This development fits into a broader 2026 wave of corporate Bitcoin treasury management, where Strategy stands out as the dominant and most aggressive player – continuing to accumulate while many peers have slowed purchases amid market weakness.

Forward outlook

This development could influence Strategy’s cost of capital – the return it must provide to investors and lenders – and future fundraising ability. By addressing near-term debt maturities, the company may strengthen its balance sheet and maintain investor confidence in its dual identity as both a software provider and a sophisticated Bitcoin treasury operator. However, any perceived softening of its Bitcoin-first stance risks compressing the premium the stock trades at relative to its underlying holdings and exposing tensions in its hybrid business model.