Strategy’s preferred stock funding engine could hit a key constraint within the next year, potentially slowing the company’s Bitcoin purchases unless it expands issuance capacity or leans more heavily on common-stock sales, according to Delphi Digital.
Delphi said Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC, has become one of the company’s main Bitcoin-buying tools but has an authorized issuance cap of about $28.3 billion.
If the cap is reached without an extension, Strategy’s Bitcoin accumulation could “slow or stop while the dividend obligation remains,” the report said.
The report highlights how one of Strategy’s main capital-raising mechanisms is approaching an inflection point that may dictate the $BTC accumulation rate of the largest corporate Bitcoin holder.
The report comes after Strategy announced another 535 Bitcoin acquisition for $43 million on Monday, marking its first investment since April 27, when the company bought 3,273 $BTC for $255 million. The filing showed that only about $100,000 worth of capital was funded from the issuance of STRC stock, while the majority of the acquisition, or $42.9 million, was funded through the sales of Class A common stock (MSTR).
STRC was first introduced by Strategy in July 2025 when the company raised $2.5 billion in the stock’s initial public offering (IPO). STRC is a Nasdaq-listed preferred security that pays variable monthly dividends, which currently stand at 11.5%. STRC is perpetual, meaning the company is not obligated to buy back the stock at a specified date.
Source: Delphi Digital
Strategy can raise funds through different models following STRC issuance cap
Researchers at Delphi Digital pointed out that Strategy has other capital-raising mechanisms, which largely depend on its market net asset value (mNAV), which measures the ratio between a company’s enterprise value and the total value of its cryptocurrency holdings.
“Strategy will use STRC as its main accumulation vehicle as long as MSTR mNAV stays low,” Delphi’s head of research, Ceteris, told Cointelegraph. “If MSTR mNAV expands again it would be prudent to start more ATM MSTR sales to acquire $BTC.”
Strategy’s mNAV stood at 1.25x on Thursday, down from 2.11x a year ago, Strategy’s dashboard shows. This means that the company is trading at a premium to its Bitcoin holdings.
Strategy MSTR mNAV, other key metrics. Source: Strategy.com
An mNAV reading below 1 limits a company’s capital raising ability, while a reading above 1 enables the issuance of more stock to fuel Bitcoin acquisitions.
Related: Capital B raises $17.8M to expand its Bitcoin treasury
Strategy approaches major cash obligation in September 2027
Strategy is approaching its next major cash obligation in September 2027, which is set to be fully covered by its $2.25 billion of cash reserves, according to Delph Digital researcher Aatharv D, who authored the report.
“The financials do not read panicky,” he told Cointelegraph, adding:
“If management believes the cycle bottom is in, the posture is to lean into $BTC accumulation, not pull back.”
Strategy is currently using its At-The-Market (ATM) equity offering program to service the preferred dividend payments. However, provided that Strategy’s mNAV expands, common issuance may become accretive again, enabling Strategy to “redirect” the ATM proceeds towards Bitcoin accumulation, giving STRC stock some “breathing room,” explained the researcher.
Strategy’s ATM program enables the company to sell common stock (MSTR) or preferred stock such as STRC directly into the open market at prevailing prices, enabling capital raising without large offerings. Strategy debuted its latest $44 billion ATM program on March 24.
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