Karla Barker 
Strategy is under renewed scrutiny over its preferred stock financing model. Investors are questioning whether dividend obligations could force the company to sell some of its Bitcoin.
The situation has “gotten out of hand,” according to Jeff Dorman, chief investment officer at Arca. He made this statement in an X post on Thursday, referring to the roughly $15 billion in preferred stocks that carry around $1.5 billion in annual dividend obligations.
Dorman warned that this structure might become increasingly difficult to manage if market conditions stay volatile. Bitcoin (BTC) is currently trading about 16% lower year-to-date at roughly $73,737.
These remarks add to a growing debate. The key question is whether Strategy’s Bitcoin-linked capital structure can handle prolonged price swings without forcing asset sales.
$15 billion preferred stock under pressure
Dorman’s warning focuses on Strategy’s financing model, which includes a large issuance of preferred stock with fixed dividend commitments.
Strategy has issued five preferred shares: STRK, STRF, STRD, STRC, and STRE. Each carries different dividend terms, seniority, and risk exposure within the capital structure.
Dorman argues the model was built on the assumption that Bitcoin would keep rising strongly enough to support it. He described it as a bet that BTC was “about to moon” and could fund future obligations.
He noted that Strategy’s equity raises helped ease near-term default concerns. But he questioned what followed, calling its decision to repurchase 2029 maturity bonds “baffling” given ongoing pressure from dividend obligations.
According to Dorman, the structure leaves only stark outcomes: either “sell BTC to pay the prefs” or “stop paying the dividend.” Each carries direct and asymmetric consequences for Strategy, its investors, and Bitcoin itself.
CEO confirms possible Bitcoin sales as Polymarket odds rise
Dorman’s remarks came as Strategy CEO Phong Le confirmed that the company might sell Bitcoin at some point in the future. This followed executive chairman Michael Saylor raising such a possibility in mid-May.
“We’ll likely sell Bitcoin at some point in time, but we will be net increasing our Bitcoin and more importantly, increasing our Bitcoin per share,” Le said in a CNBC Fox Business exclusive on Thursday.
Expectations are rising that Strategy might need to sell BTC to manage its balance sheet and obligations. Prediction market platform Polymarket has shown increasing odds of a sale across 2026.
The “MicroStrategy sells any Bitcoin by” market shows roughly a 90% chance by Dec. 31, 2026, 71% by June 30, and 18% by May 31.
So far this year, Strategy has purchased around 170,000 BTC. This brings its total holdings to 843,738 BTC, purchased at an aggregate price of $63.87 billion and an average price of about $75,700 per Bitcoin.