Capital Raising Mechanisms in Adverse Conditions
The company’s ability to accumulate BTC isn’t reliant solely on operational cash flows from its legacy software business (which is now secondary). Instead, it leverages flexible financing tools to raise funds specifically for Bitcoin purchases, even when crypto prices are falling and the stock is under pressure. This includes:
- Equity Offerings: They use at-the-market (ATM) sales of common stock and preferred shares to generate quick capital. For instance, in mid-February 2026, Strategy funded a $168.4 million BTC purchase (2,486 coins at an average of $67,710) partly through $90.5 million in common stock sales and $78.4 million from preferred series shares. 6 This came amid a broader BTC deleveraging event, showing their capacity to tap equity markets despite volatility.
- Debt Issuance: Convertible notes and other “digital credit” instruments are a staple. In FY2025, they raised over $25 billion this way, acquiring around 225,000 BTC and achieving a 22.8% annual “Bitcoin yield” (growth in BTC per share). 3 Management plans to issue $6–10 billion annually in such credit going forward, targeting 5%–14% yearly yield expansion, even as annual interest commitments hit $888 million. 3
- Strategic Timing: They buy dips aggressively. In January 2026, they acquired $2.13 billion worth of BTC over eight days, despite a 7.4% stock drop and 3.6% BTC decline that day. 0 Earlier in February, another $90 million buy (1,142 BTC) boosted the stock 21%, illustrating how these moves can reinforce investor confidence in a reflexive loop. 5
This setup creates a “digital fortress” mindset, as Chairman Michael Saylor describes it, with an “indefinite Bitcoin horizon.” 1 As of early February 2026, holdings stood at around 714,644–717,131 BTC, acquired at an average cost of ~$76,000 per coin, for a total cost basis of $54.35–$48.8 billion (depending on the exact snapshot). 6 7 Even with BTC trading below $70,000 and unrealized losses exceeding $5.7 billion, they keep adding because the strategy prioritizes BTC-per-share growth over short-term quarterly results. 0 6
Risks and Sustainability
While this makes Strategy resilient in tough markets, it’s not without vulnerabilities:
- Market Dependence: Access to capital markets is crucial. If the stock’s multiple to net asset value (mNAV) stays below 1 (as it did in Q4 2025 amid a $12.4 billion loss from BTC’s mark-to-market decline), raising funds gets harder. 1 9 CEO Phong Le has noted that without other capital sources, they might sell BTC if BTC drops further (e.g., below $70,000, potentially closing markets and putting them $4 billion in the red). 1 8
- Volatility Amplification: The stock moves in tandem with BTC, but the leverage from debt and dilution can exacerbate downsides. Still, in a BTC recovery, this amplifies upside too.
- Broader Impact: Their holdings (over 3.4% of BTC’s total supply) create a feedback loop with crypto markets—continued buying signals strength, but any pause or forced sale could pressure prices. 6 7
In essence, yes—the strategy’s “perfect” angle lies in its engineered ability to turn market weakness into accumulation opportunities via non-traditional financing, betting on BTC’s long-term appreciation. This has worked through multiple cycles since 2020, but it hinges on sustained investor faith and open capital markets. If you’re holding MSTR or considering it, monitor BTC trends and their issuance pipeline closely.