Strategy faces calls for $4B Bitcoin sale

• Arca Chief Investment Officer Jeff Dorman said Strategy may need to sell up to US$4 billion of Bitcoin to support its STRC preferred stock.
• STRC fell as low as US$82.53 before closing at US$88.59, remaining below its US$100 par value.
• Dorman said Strategy may alternatively continue selling MSTR shares, while Peter Schiff warned of potential legal action related to STRC's decline.

Strategy faces pressure over its STRC preferred stock after Arca Chief Investment Officer Jeff Dorman suggested the company may need to sell between US$3 billion and US$4 billion of Bitcoin (CRYPTO:BTC) to help restore the security's US$100 par value.

The comments followed a decline in STRC, which traded as low as US$82.53 on June 18 before recovering to close at US$88.59, leaving the preferred stock well below its stated par value.

“Either sell an enormous amount of BTC and MSTR to help bring STRC back up near par,” said Arca Chief Investment Officer Jeff Dorman.

Dorman said his preferred outcome would be a Bitcoin sale valued at US$3 billion to US$4 billion, although he assigned a 70% probability to Strategy continuing its current approach of selling smaller amounts of MSTR stock, which he argued could weigh on common shareholders while offering some support to STRC holders.

He added that another option would be suspending payments linked to preferred securities, a move he estimated could reduce preferred share values to between 30 and 40 cents on the dollar, and following the comments the Strategy share price was not disclosed.

Dorman estimated that Strategy held around US$35.2 billion of unencumbered Bitcoin collateral against an equity market capitalisation of about US$40.4 billion and argued that MSTR was still trading above its net asset value based on his calculations.

The debate follows broader scrutiny of Strategy's capital structure, with critics including Peter Schiff warning of potential lawsuits over STRC's decline, while Dorman said future performance could still improve if Bitcoin rises and the company avoids additional dilution through fundraising, dividends, or asset sales.

At the time of reporting, Bitcoin price was $62,919.10.