Strategy Inc. (formerly MicroStrategy) faces significant downside risks with its stock down nearly 69% over the past year due to large unrealized losses on bitcoin holdings and dilutive equity issuance to fund more bitcoin purchases. CEO Phong Le and Executive Chairman Michael Saylor continue to buy bitcoin, but a hawkish Federal Reserve under Kevin Warsh and accounting rules that force losses onto earnings weigh heavily on the stock. The company’s software business grows, but heavy debt, preferred dividends, and the risk of MSCI delisting add pressure. Investors await Fed policy signals and bitcoin price moves to determine if the stock can recover or will fall back toward $65, its level from five years ago before heavy leverage.
