Michael Saylor's Strategy faces no easy way out as bitcoin prices continue to dr

Pressure on bitcoin's biggest buyer, Strategy (MSTR), isn't letting up.

The company is experiencing pains as a result of its financial engineering. Starting last year, it issued a series of high-dividend preferred stocks to fund bitcoin purchases. While bitcoin (BTC-USD) prices dropped, its obligations to pay dividends only grew.

Strategy's stock fell on Thursday to its lowest level in over two years, marking a 46% drawdown for the last 30 days. Its preferred stock, which is intended to keep a price of $100, briefly fell as low as $74.

The company is trapped between a rock and a hard place. For its preferred stock to rebound, it needs to rebuild its cash pile. Yet when it sold bitcoin recently, it only rocked confidence in the cryptocurrency.

"They have a big problem," said Jeff Dorman, chief investment officer of digital asset investment firm, Arca. "They can't satisfy all parts of their capital structure."

"They're in a pickle, and they have to sell something," Fundstrat's head of digital assets Sean Farrell told Yahoo Finance.

Strategy's problem comes down to its preferred shares, a hybrid security with some bond-like features. It introduced these less typical financial in

Fuente original: Yahoo Finance (https://finance.yahoo.com/markets/article/michael-saylors-strategy-faces-no-easy-way-out-as-bitcoin-prices-continue-to-drop-112328170.html)