MSTR Stock Plunges After Bitcoin Selloff
MSTR stock fell after Strategy Inc set a $1.44 billion reserve and cut FY2025 guidance amid a bitcoin selloff, raising trading risk and volatility.
KEY TAKEAWAYS
- Established a $1.44 billion reserve to fund preferred dividends and debt interest.
- Revised FY2025 net income range to a loss of $5.5 billion to a gain of $6.3 billion.
- Funded the reserve with $1.478 billion raised via common stock sales.
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Strategy Inc (MSTR) said on Dec. 1, 2025, it would set aside cash to cover preferred dividends and interest while narrowing its 2025 profit outlook. MSTR stock fell as a broader bitcoin selloff erased gains from October.
Reserve Establishment and Guidance Revision
In a press release via an SEC filing on Dec. 1, Strategy Inc established a $1.44 billion reserve to fund preferred stock dividends and debt interest. The reserve currently covers about 21 months of obligations, with a minimum maintenance floor of 12 months and a medium-term target of 24 months or more. The company funded the reserve with $1.478 billion raised through the sale of 8.214 million common shares. The filing stated, "The company initially intends to keep enough money in the reserve to fund at least twelve months of dividends."
The company revised its full-year 2025 guidance, projecting net income between a loss of $5.5 billion and a gain of $6.3 billion, down from prior guidance targeting a $24 billion profit. It lowered its bitcoin yield target to 22%–26% from 30% and set a bitcoin-dollar-gain target of $8.4 billion to $12.8 billion, compared with a previous $20 billion goal. These targets assume a year-end bitcoin price between $85,000 and $110,000, down from $150,000, and depend on successful future capital raises and continued bitcoin purchases.
Recent accounting changes require fair-value marking of bitcoin holdings, with unrealized gains and losses flowing through net income each reporting period. The filing noted this increases earnings sensitivity to bitcoin price swings, framing the reserve and guidance revision as a response to amplified volatility.
Bitcoin Holdings and Market Impact
The filing showed Strategy holds 650,000 bitcoin at an aggregate cost basis of $48.38 billion, with an average cost per coin of $74,436. At the time of the announcement, those holdings had an estimated market value of about $56 billion, representing roughly 3.1% of total bitcoin supply. The company recorded a recent purchase of 130 bitcoin for $11.7 million at an average price near $89,860 to $89,960 per coin.
Bitcoin traded near an October high of about $111,612 before sliding to intraday lows around $80,660 to $84,500 on Dec. 1 and was near $87,000 as Strategy issued its filing. This amplified mark-to-market effects on the company's holdings.
Shares declined sharply on the day, with intraday drops of roughly 8.4% to 10.8% and a premarket slide near 4.4%, as investors digested the lower outlook and the equity-funded reserve.
Strategy’s large bitcoin holdings combined with fair-value accounting explain its twin response: raising equity to seed a cash cushion for dividends and interest while narrowing profit expectations based on a lower bitcoin price trajectory. These actions depend on capital markets and continued bitcoin accumulation under the company’s plan.
This episode highlights how bitcoin price swings now directly affect Strategy’s reported results and near-term financing decisions, increasing its reliance on external capital and the market value of its digital assets.
Quote
"The company initially intends to keep enough money in the reserve to fund at least twelve months of dividends." — Strategy Inc (press release)
