Strategy situation ‘out of hand,’ says Arca exec on $15B preferred stock burden
Strategy’s preferred-stock financing is under renewed scrutiny because its roughly $15 billion in preferred shares create about $1.5 billion in annual dividend obligations. Arca CIO Jeff Dorman warned the structure could become hard to sustain if Bitcoin stays volatile or weak, forcing an uncomfortable choice: sell BTC to cover dividends or suspend payments. The concern is that the model assumes Bitcoin would keep rising enough to fund the obligations. The debate intensified after CEO Phong Le said Strategy may eventually sell Bitcoin, even while aiming to keep increasing BTC per share. Prediction markets now assign rising odds that the company will sell some Bitcoin by 2026. Strategy currently holds about 843,738 BTC, after buying roughly 170,000 this year.
