Bitcoin News
MicroStrategy’s 2026 Bitcoin buys: debunking the dilution panic
The BPS flywheel
MicroStrategy holds 845,050 Bitcoins worth $63.727 billion as of August 31, 2026. The company targets a single metric: Bitcoin per share. This ratio drives every treasury move. When the mNAV ratio stays between 1.0 and 1.5, the company issues equity to buy more Bitcoin. This process increases the amount of Bitcoin every shareholder holds. Since the 2024 peak, mNAV compression forced a shift in tactics. The company now relies heavily on preferred stock to fund purchases. This avoids the dilution that occurs when the stock price fails to outpace Bitcoin.
The strategy changed.
Class A shares increased 313% from 76 million at the end of Q2 2020 to 314 million by February 12. In 2025, the company sold $16.5 billion in common equity to capture 6% of the total U.S. market. This massive issuance drove the Bitcoin treasury higher. However, the premium to Bitcoin shrank as the stock price fell 72% from $457 to $130. This drop happened far faster than Bitcoin’s 51% tumble from $129 to $68. The software division grew 12% in Q1 2026, which helps offset some operational costs through the Mosaic AI infrastructure layer.
Debt and the 2028 wall
The company owes $8.2 billion. Preferred stock dividends cost $888 million annually. You should watch the 2028 refinancing deadline. The company must refinance $6 billion in debt that matures in 2028.
| Metric | Value |
|---|---|
| Total Bitcoin Holdings (Aug 2026) | 845,050 BTC |
| Bitcoin Value (Aug 2026) | $63.727 billion |
| Total Debt | $8.2 billion |
| Annual Preferred Dividends | $888 million |
| 2028 Debt Refinancing | $6 billion |
The math looks difficult.
The company faces $1.5 billion in annual dividend obligations tied to its perpetual preferred stock, STRC. This cash demand creates pressure because the software business generates no cash to cover these payments. In early 2026, the company purchased 535 Bitcoin for $43 million at an average price of $80,340. This purchase covers a small fraction of the $30 billion in total Bitcoin purchases analysts expect for 2026. The 2030 convertible bond has a maturity date of March 1, 2030, and carries a 0% coupon rate. Bondholders can convert their notes into 2.3072 shares for every $1,000 if the stock price exceeds $433.43.
Heavy losses and liquidation risk
The company reported a $12.4 billion loss for the final quarter of 2025. The price plunge of Bitcoin caused this loss. The company held 713,502 Bitcoins worth $45.9 billion during that period. Because the company spent $54.2 billion on its total Bitcoin acquisitions, it faces a massive unrealized loss of $8.3 billion for its 713,502 Bitcoins when the market price undergoes a significant and sudden decline.
The company’s stock dropped 75% from its July peak. The company also faces pressure as Bitcoin prices fell 23% in Q1 2026, specifically from $87,500 to $67,700. More than 434,000 of the company’s coins cost more than $80,000 each. This generates an unrealized loss of $7.6 billion. During that same quarter, the company saw a $12.54 billion unrealized loss on its income statement.
The company must decide whether to sell Bitcoin or issue more shares to pay the $1.5 billion in annual dividends. If the stock price remains below the $433.43 conversion threshold, bondholders will likely exercise their put option in March 2028 to reclaim their full $1,000 principal in cash. This would require the company to pay out $2 billion in cash. I would say the current debt load makes this a terrifying prospect for long-term holders. The division’s revenue of $0.477 billion provides a small buffer against these massive crypto-driven losses.
Will the stock rise enough to cover the 2028 debt?
