MicroStrategy’s STRC Nears $28.3B Cap, May Slow Bitcoin Buys

MicroStrategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, trading as STRC, is approaching its roughly $28.3 billion authorized issuance cap, and a research report from Delphi Digital says that could slow the company’s Bitcoin purchases unless issuance capacity is expanded or the company shifts more funding to common-stock sales.

STRC is a Nasdaq-listed perpetual preferred security that pays variable monthly dividends currently near 11.5%. MicroStrategy introduced the security in July 2025 and raised about $2.5 billion in the initial offering. Because STRC has no maturity date, the company must meet ongoing dividend obligations; Delphi warned that if the issuance cap is reached and not extended, Bitcoin accumulation could “slow or stop while the dividend obligation remains.”

MicroStrategy disclosed the purchase of 535 Bitcoin for $43 million on Monday, its first disclosed acquisition since April 27, when it bought 3,273 Bitcoin for $255 million. Company filings for the recent purchase show roughly $100,000 of the funding came from STRC issuance, while about $42.9 million was raised through the sale of Class A common shares (MSTR). The filings indicate the company is combining STRC issuance with common-stock sales to fund Bitcoin purchases.

Delphi’s report notes MicroStrategy can also use other funding models that depend on market net asset value, or mNAV, which compares the company’s enterprise value to the value of its cryptocurrency holdings. An mNAV above 1.0 makes common-stock issuance more attractive; an mNAV below 1.0 limits that option. MicroStrategy’s mNAV was 1.25x on Thursday, down from 2.11x a year earlier, meaning the company trades at a premium to its Bitcoin holdings but has less room than a year ago to issue accretive common equity.

“MicroStrategy will use STRC as its main accumulation vehicle as long as MSTR mNAV stays low,” Ceteris, head of research at Delphi, noted. Delphi added that if mNAV expands, MicroStrategy could increase at-the-market sales of MSTR stock to buy Bitcoin, which would reduce pressure on STRC issuance.

The company is using an At-The-Market equity offering program to help service STRC dividend payments. MicroStrategy refreshed its ATM program on March 24 with capacity up to $44 billion, allowing sales of common or preferred shares directly into the market at prevailing prices. Delphi observed that if mNAV improves, proceeds from the ATM program could be redirected to Bitcoin purchases rather than dividend coverage.

Delphi also flagged a major cash obligation due in September 2027. Researcher Aatharv D wrote that obligation should be fully covered by MicroStrategy’s roughly $2.25 billion in cash reserves and that the company’s financial position does not appear distressed. He added that if management concludes the market cycle has bottomed, the company is positioned to increase Bitcoin accumulation.

If STRC reaches its cap and authorization is not extended, MicroStrategy would face a choice between accelerating common-stock sales if market conditions allow or reducing the pace of Bitcoin purchases while meeting preferred dividend obligations. The company’s funding mix and market valuation will shape its approach to buying Bitcoin over the coming year.