For the first time ever, Strategy's market capitalization has fallen below the value of its Bitcoin reserves. The enterprise mNAV metric, which accounts not only for common stock but also for all debt, preferred shares, and cash reserves, has dropped below 1. While the baseline mNAV already showed a discount back in December 2025, the current decline in enterprise mNAV reflects the full debt burden. With Bitcoin trading around $60,000, the company's reserves are estimated at approximately $51.1 billion, while the total market value of the business has shrunk to $50.4 billion.

For Strategy's business model, this is a critical juncture. Previously, the company successfully financed its Bitcoin purchases by issuing new shares while they traded at a premium to the underlying asset value. Now, issuing new stock would only dilute existing shareholders. Management is urgently reviewing its strategy: earlier, the company's CEO Phong Le acknowledged that if mNAV were to drop below 1 and other funding sources were exhausted, the firm might have to part with some of its Bitcoin holdings. At the end of May, the company already sold 32 coins at an average price of $77,135.

Currently, Strategy remains the largest corporate holder of Bitcoin, owning 847,363 coins. However, its average purchase price stands at $75,651, meaning it holds unrealized losses at current prices.

The situation is compounded by pressure on the perpetual preferred shares (STRC), which were actively used to finance purchases. STRC quotes have fallen more than 26% below their $100 par value, while their effective yield has approached 15%. To support investors, Strategy raised the annual dividend rate on these securities by 0.5 percentage points to 12% and switched to a semi-monthly payment schedule.

Michael Saylor has introduced a new capital management framework. The company's cash reserve has been increased to $2.55 billion, enough to cover more than 17 months of dividend and interest obligations. In addition, the board of directors has authorized the monetization of up to $1.25 billion worth of Bitcoin to replenish cash reserves and pay dividends, as well as launching buyback programs of up to $1 billion each for shares and debt instruments.

Strategy's troubles have triggered a sell-off across the entire corporate Bitcoin treasury sector. The enterprise mNAV for Japan's Metaplanet fell to 0.9, while Nakamoto's stood at 0.92. Experts and competitors are raising the alarm. Coin Bureau founder Nic Puckrin believes this is undermining investor confidence, while Ripple CEO Brad Garlinghouse has called the model of funding purchases through preferred shares harmful to the market. CryptoQuant analysts have recommended that the company halt its Bitcoin accumulation and focus on rebuilding its dollar reserves.