Jeff Dorman calls for massive Bitcoin liquidation to stabilize Strategy

Dorman estimates that selling $3 billion to $4 billion in Bitcoin represents the most effective move to bolster STRC preferred shares, which recently traded 17% below their $100 par value. While he assigns only a 25% probability to this outcome, he maintains that such a sale would provide the necessary liquidity to satisfy investor concerns without abandoning the firm’s core Bitcoin-heavy thesis. The alternative, which Dorman views as 70% likely, involves the continued sale of MSTR common stock—a strategy he labels non-accretive that risks further burdening common shareholders.

The pressure on Strategy’s financing model extends beyond stock performance. With QCP analysts estimating that current liquidity covers dividend obligations for roughly seven and a half months, the company faces a narrowing window to secure alternative capital. Peter Schiff has further amplified these concerns, suggesting that income-focused investors who purchased the security may have grounds for legal action if the risks were inadequately disclosed. Dorman also highlighted a "nuclear option" with a 5% probability: the total elimination of preferred dividend payments. While this would save the firm roughly $1.7 billion in annual cash outflows, it would likely cripple its future access to capital markets and leave preferred shareholders with significant losses. As of mid-June, MSTR trades at 1.15 times its net asset value, a premium that Dorman suggests is unsustainable without a rapid recovery in the price of Bitcoin.