Strategy is under renewed scrutiny over its preferred stock financing model as investors question whether dividend obligations could force a Bitcoin sale.
Arca chief investment officer Jeff Dorman said the situation has “gotten out of hand,” referring to roughly $15 billion in preferred stocks carrying $1.5 billion in annual dividend obligations. Dorman warned the structure may become unsustainable if market conditions remain volatile, with Bitcoin trading about 16% lower year-to-date.
Dorman says the model was built on the assumption that Bitcoin would continue rising strongly enough to support it. He described Strategy's decision to repurchase 2029 maturity bonds as “baffling” given the dividend pressure. The outcomes, he said, are either “sell BTC to pay the prefs” or “stop paying the dividend.”
CEO Phong Le confirmed the company might sell Bitcoin at some point, echoing a possibility raised by executive chairman Michael Saylor in mid-May. Polymarket odds show roughly a 90% chance of a sale by the end of 2026.
Strategy now holds 843,738 BTC, purchased at an average price of approximately $75,700 per Bitcoin.