MSTR Shares Sink Nearly 10% Amid Bitcoin Slump and Securities Fraud Investigation

Strategy Inc. (MSTR) is facing a perfect storm of bad news, as its stock tumbled more than 9% on Thursday, touching its lowest point since March 2024. The sell-off marks the fifth consecutive day of losses, bringing the total five-day decline to nearly 30%. The sharp drop came as Bitcoin slid below the $60,000 threshold and news broke that a securities fraud investigation targeting the company had been launched.

Shares of the Michael Saylor-led Bitcoin treasury firm fell to approximately $85 by midday Thursday, a stark contrast to the $117 price seen at the beginning of the week. Over the past month alone, MSTR has lost around 36% of its value — nearly twice the 18.5% decline recorded by Bitcoin over the same timeframe.

Adding fuel to the fire, Rosen Law Firm publicly announced it is probing Strategy for potential securities fraud, claiming the company "may have issued materially misleading business information to the investing public." The investigation encompasses all five of Strategy's publicly traded securities: MSTR, STRF, STRC, STRK, and STRD.

The legal troubles are compounding what analysts describe as a structural financial problem rooted in Strategy's own capital strategy. The company currently holds 847,363 Bitcoin — the largest corporate Bitcoin reserve in the world — but the average purchase prices across the 2024, 2025, and 2026 acquisition tranches now leave the entire portfolio underwater. Unrealized losses on the Bitcoin holdings are estimated at approximately $10.6 billion.

One of the most alarming signals for investors is the condition of Strategy's STRC preferred stock, which has fallen to an all-time low, now trading around $76 — roughly 24% below its $100 par value. This matters significantly because Strategy has historically relied on preferred stock issuance to finance its ongoing Bitcoin acquisitions. When preferred shares trade below par, this fundraising avenue effectively dries up.

As Strategy continued issuing STRC over the past six months, its annual dividend obligations skyrocketed from $300 million at the start of 2026 to $1.2 billion — a fourfold increase — while cash reserves dropped by 38% over the same period.

On-chain analytics firm CryptoQuant issued a warning on June 23, urging Strategy to halt Bitcoin purchases and rebuild its cash reserves to approximately $2.8 billion before resuming accumulation. The firm highlighted that dividend coverage has collapsed from over seven years to roughly 14 months.

Strategy appears to have already taken a cautious step back before the report was published. During the week of June 22, the company acquired just 520 Bitcoin for around $35 million — a fraction of its previous buying pace. Additionally, $300 million out of a $335.5 million common stock raise was directed into cash reserves, bringing the total to $1.4 billion.

Michael Saylor has yet to make any public statement regarding either the securities investigation or CryptoQuant's warning, leaving investors and analysts to speculate about the company's next move in an increasingly turbulent market environment.