NEW YORK, Feb 4, 2026, 11:35 EST — Regular session
- Strategy shares dropped roughly 6.5% in early trading, dragged down by another slump in bitcoin.
- A recent filing revealed Strategy offloaded stock, increased its bitcoin holdings, and boosted its preferred dividend rate.
- Traders are zeroing in on Thursday’s quarterly results, watching closely for fresh clues on funding and the speed of bitcoin purchases.
Strategy Inc’s shares dropped 6.5%, slipping to $124.66 during Wednesday morning trading, deepening the steep decline in the bitcoin-related stock.
This shift is significant since Strategy now acts more like a high-beta proxy for bitcoin than just a typical software stock. Its share price frequently swings beyond the token itself, especially during shifts in crypto sentiment.
Investor attention has returned to that sensitivity this week, with the familiar question resurfacing: can the company sustain funding bitcoin buys and preferred payouts without relying heavily on fresh issuance, even as bitcoin dips once more.
Strategy disclosed in an 8-K dated Feb. 2 that it sold 673,527 Class A shares via an at-the-market (ATM) program, generating net proceeds of $106.1 million. The company purchased 855 bitcoin for $75.3 million during the week ending Feb. 1, pushing total bitcoin holdings to 713,502 at an average cost of $76,052 each, with a total purchase price of $54.26 billion. The filing revealed roughly $8.06 billion of common stock remains available under the ATM facility. Additionally, Strategy raised the dividend on its Variable Rate Series A Perpetual Stretch preferred shares (STRC) to 11.25%, declaring a $0.9375 per share cash dividend payable Feb. 28.
Bitcoin dropped roughly 4.5% to $73,217. The iShares Bitcoin Trust ETF declined 3.5%, while Coinbase Global tumbled 5.4%, highlighting widespread weakness among U.S.-listed crypto assets.
Strategy pointed out a tax benefit for investors holding its preferred shares. It noted that all 2025 distributions on these preferred equity instruments qualify as a non-taxable return of capital for U.S. federal income tax purposes, which typically lowers the investor’s tax basis. The company does not anticipate earning profits that would alter this tax status anytime soon. In 2025, Strategy raised $5.5 billion through five perpetual preferred IPOs, plus another $1.9 billion through ATM programs, and has paid out $413 million in total distributions so far.
Wall Street has cut its targets once again. Canaccord Genuity’s Joseph Vafi slashed his price target on Strategy from $474 to $185 but kept a buy rating. He argued that bitcoin hasn’t lived up to its “digital gold” label and is stuck in an “identity crisis,” acting more like a risk asset. Vafi noted that Strategy’s debt is modest compared to its bitcoin holdings and said quarterly earnings matter little since bitcoin drives the stock’s valuation. (TipRanks)
Traders face a tangled near-term picture: the company continues buying bitcoin, selling stock, and paying hefty preferred dividends, even as the token’s price keeps dropping.
The downside is clear-cut. If bitcoin continues to slide, the value of Strategy’s assets declines, funding risks becoming more dilutive, and the market may begin to factor in tougher capital-market access for a company dependent on it.
The next big catalyst is just around the corner. Strategy plans to release its fourth-quarter 2025 results after U.S. markets close Thursday, followed by a live video webinar at 5:00 p.m. Eastern. Investors will be tuning in for updates on bitcoin holdings, funding capacity, and whether there’s any shift in the pace of purchases. (Strategy)
