According to Delphi Digital, Strategy’s preferred stock funding engine could run into significant constraints within the next year, potentially delaying the company’s Bitcoin purchases unless it expands its issuance capacity or puts more emphasis on common stock sales.
Delphi said Strategy’s floating rate Series A perpetual stretch preferred stock, known as STRC, is one of the company’s primary Bitcoin purchasing tools, but has an authorized issuance limit of about $28.3 billion.
If the cap is reached without an extension, the strategy’s Bitcoin accumulation could be “slowed or halted while dividend obligations remain,” the report said.
The report highlights how one of Strategy’s key financing mechanisms is approaching an inflection point that could determine the company’s growth. $BTC Accumulation rate of largest corporate Bitcoin holders.
The report comes after Strategy announced on Monday that it would acquire an additional 535 Bitcoins for $43 million, marking its first investment since April 27, when it purchased 3,273 Bitcoins. $BTC For $255 million. According to filings, the capital raised through the issuance of STRC stock was worth only about $100,000, and the majority of the acquisition price, $42.9 million, was financed through the sale of Class A common stock (MSTR).
STRC was first introduced in July 2025 when Strategy raised $2.5 billion in an initial public offering (IPO). STRC is a Nasdaq-listed preferred security that pays a monthly floating dividend, which is currently 11.5%. STRCs are perpetual, meaning the company has no obligation to buy back the shares on a specified date.
sauce: delphi digital
A strategy that allows you to raise funds through various models, subject to STRC issuance limits
Delphi Digital researchers noted that Strategy also has other funding mechanisms, which rely heavily on market net asset value (mNAV), which measures the ratio of a company’s enterprise value to its total cryptocurrency holdings.
“Strategies will use STRC as their primary accumulation vehicle as long as MSTR’s mNAV is low,” Delphi head of research Seteris told Cointelegraph. “If MSTR mNAV expands again, it would be wise to launch and capture more ATM MSTR sales.” $BTC”
Thursday’s mNAV was 1.25x, down from 2.11x a year ago, according to Strategy’s dashboard. This means that the company is trading at a premium to its Bitcoin holdings.
Strategy MSTR mNAV and other key indicators. Source: Strategy.com
An mNAV value below 1 limits a company’s ability to raise capital, while an mNAV value above 1 allows it to issue more shares to facilitate Bitcoin acquisitions.
Related: Capital B raises $17.8 million to expand Bitcoin treasury
Strategy approaches major cash obligation in September 2027
Strategy is facing its next major cash debt in September 2027, which will be fully covered by its $2.25 billion in cash reserves, according to Delf Digital researcher Aasab D., who wrote the report.
“The financial situation is not panicky,” he told Cointelegraph, adding:
“If management believes they are at the bottom of the cycle, their attitude is $BTC Instead of pulling it back, it accumulates. ”
Strategy currently pays preferred dividends using an at-the-market (ATM) stock offering program. However, if Strategy’s mNAV expands, common issuance could increase again, allowing Strategy to “redirect” ATM revenue to Bitcoin accumulation, giving STRC stock some “breathing room,” the researcher explained.
Strategy’s ATM program allows the company to sell common stock (MSTR) or preferred stock, such as STRC, directly into the open market at prevailing prices, allowing it to raise capital without a large-scale offering. On March 24, Strategy announced its latest $44 billion ATM program.
magazine: Strategy reveals why it sells $BTCTrump Media Posts Losses: Hodler’s Digest, May 3-9
