Strategy MSTR Stock Down 58% YoY, Bitcoin Holdings Valued Higher

Strategy Inc. (MSTR) stock has fallen 58% over the past year to trade near $166, even as the company's Bitcoin holdings have nearly doubled to 843,738 BTC, now valued at $64.83 billion [2]. This decline has pushed MSTR's market capitalization to $58.6 billion, valuing its Bitcoin holdings at $6 billion more than the entire company [2].

MSTR's Premium Compression

MSTR's stock peaked near $540 in November 2024, representing a 70% drop to its current level [2]. This decline coincides with a compression in MSTR's premium to its net asset value (mNAV), which measures the company's market value relative to its Bitcoin holdings [2, 3]. In November 2024, mNAV reached 3.89x, meaning MSTR shares were priced at nearly four times the value of the underlying Bitcoin [2]. As of recently, mNAV has compressed to 1.24x, a 70% reduction from its peak [2]. This compression has eroded the "flywheel" mechanism where Strategy could issue new shares at a premium to acquire more Bitcoin, benefiting existing shareholders [2].

Three factors have contributed to this premium erosion. The launch of spot Bitcoin ETFs in January 2024 provided investors with direct Bitcoin exposure, reducing the need for MSTR as a proxy [2]. Throughout 2025, "copycat" treasury companies like Metaplanet emerged, replicating Strategy's model [2]. Additionally, in the first quarter of 2026, CEO Michael Saylor indicated Strategy might sell Bitcoin to fund preferred-stock dividends, a shift from his previous "never sell" stance [2].

Bitcoin Accumulation and Funding Shifts

Despite the stock's performance, Strategy continues to accumulate Bitcoin. The company's holdings have increased from approximately 444,262 BTC to 843,738 BTC over the past year [2]. Strategy's blended cost basis for its Bitcoin is $75,700 per coin [2]. With Bitcoin recently trading around $76,800, the overall position remains profitable by about $1,100 per coin, or roughly $900 million in unrealized gains [2]. A close below $75,700 would put the entire portfolio underwater for the first time [2].

Strategy recently acquired 24,869 Bitcoin for $2.01 billion between May 11 and 17, at an average price of $80,985 per coin [2]. This purchase was largely funded by sales of STRC preferred stock, which accounted for 95.9% of the $2.03 billion raised [2]. A year prior, when mNAV was higher, common stock issuance would have been the primary funding method [2]. STRC preferred shares carry an 11.50% annual dividend and do not dilute common shareholders [2, 3]. Strategy has raised $5.58 billion via STRC in 2026 alone, making it the largest preferred stock by market cap, with annual dividend costs of $1.71 billion [2].

What to watch

• mNAV trajectory: Monitor if the premium recovers towards 2x, which would signal a return to the original equity-funded Bitcoin acquisition strategy [2].
• Bitcoin price relative to $75,700: A sustained close below Strategy's blended cost basis of $75,700 would put the company's entire Bitcoin portfolio into an unrealized loss [2].
• Future funding mix: Observe whether future Bitcoin purchases are primarily funded by STRC preferred stock or if there's a pivot back to common stock, indicating mNAV recovery [2].

The current market dynamics suggest MSTR's valuation is increasingly disconnected from its underlying Bitcoin holdings, with the stock trading at a discount to the value of its digital assets. The company's ability to continue its Bitcoin accumulation strategy, particularly through preferred stock, will be key to its future trajectory.