Strategy Shares Plunge on Capital Raise Before Stunning Intraday Rebound

Strategy (MSTR) shares suffered a steep sell-off Monday after the company revealed it had raised $1.44 billion through common stock sales, a move intended to fund nearly two years of preferred dividend payments. The announcement — combined with a sharp overnight drop in bitcoin — sent the stock down as much as 12.5% to its lowest level in almost 15 months during U.S. morning trading.

Despite bitcoin showing no recovery and holding near session lows around $85,000 throughout the day, MSTR staged a remarkable turnaround. By the close, shares had pared almost all losses to finish down just 3.25%.

For now, the dramatic reversal appears to be driven mainly by aggressive short-covering. At its intraday trough of $155.61, MSTR was down nearly 40% over the past month and 66% from its 2025 high in mid-July — levels that likely forced bears to unwind positions.

Under mounting pressure from critics and shareholders over its ability to meet preferred dividend obligations, Michael Saylor’s team disclosed that the company had been quietly selling common shares in recent weeks to build a $1.44 billion reserve. The fund is intended to cover preferred dividends for the next 21 months, with the longer-term goal of establishing a 24-month cushion.

The move marked a dramatic shift for the world’s largest bitcoin-treasury company. With bitcoin plunging and Strategy’s market valuation falling sharply relative to its holdings — roughly 650,000 BTC at last update — the company appeared intent on avoiding forced bitcoin sales.

Common shareholders reacted negatively to the dilution risk. Heavy selling pressure pushed the stock sharply lower immediately after the announcement.

Gold advocate and vocal bitcoin critic Peter Schiff seized the moment to criticize the company’s approach.

“So Strategy’s new business model is to sell stock to raise cash, use that cash to buy Treasuries yielding about 4%, and then use those proceeds to service debt and preferred shares costing 8%–10%,” Schiff said. “How long will investors pretend this is viable just to gamble on Bitcoin?”

He escalated further: “Today is the beginning of the end of Strategy. Saylor was forced to sell stock not to buy Bitcoin, but to raise U.S. dollars just to cover interest and dividends. The stock is broken. The business model is a fraud, and Michael Saylor is the biggest con man on Wall Street.”

Whether Monday’s reversal marks a durable bottom for Strategy remains uncertain. Still, bitcoin and MSTR bulls may find comfort in the fact that Schiff has sounded the alarm on crypto countless times — only to watch markets reverse sharply in the following weeks or months.