MicroStrategy, a business intelligence firm, holds over 687,000 Bitcoin worth more than $63 billion. The company has been buying Bitcoin for years, making it the largest corporate holder.
In recent months, Bitcoin's price has stalled and declined. MicroStrategy's stock, trading above $173, has dropped 53% year-to-date. Bitcoin is down only 11% over the past year.
Historically, the stock traded at a premium of over two times its Bitcoin holdings. By mid-January 2026, that premium collapsed. The stock occasionally traded at a discount to its net asset value, a rare event signaling investor concern.
Critics have intensified scrutiny. While other public companies are buying Bitcoin, MicroStrategy faces unique challenges. It operates as a Bitcoin treasury company, using stock sales and borrowed money to purchase and hold Bitcoin long-term.
MSCI is reviewing whether to reclassify firms with over 50% of assets in crypto as "funds" rather than "operating companies." JPMorgan estimated removal from the MSCI index could trigger up to $8.8 billion in passive outflows.
In early January, MicroStrategy issued over $1.1 billion in new stock to buy 13,627 Bitcoin. Constant share issuance dilutes existing shareholders. If Bitcoin's price doesn't outpace share count growth, the Bitcoin-per-share value declines.
The company reported a $17.44 billion unrealized loss in Q4 2025. Its legacy software business generates about $125 million in operating cash flow, insufficient to service billions in debt used for Bitcoin purchases.
Michael Saylor, the founder, remains defiant. In a podcast, he argued a company losing $10 million in operations is "saved" if its Bitcoin gains $30 million. He maintains MicroStrategy is a "Bitcoin Development Company" and traditional cash-flow metrics are obsolete.
MicroStrategy's fortunes depend on Bitcoin price movements. If crypto prices rise, the stock may trade at a premium again. A higher premium could allow the company to use low-interest convertible debt instead of equity issuance, reducing dilution concerns.
By the end of 2025, the Bitcoin yield stood at over 22%. MSCI needs to officially confirm whether digital asset treasury companies like MicroStrategy will remain in the index. Such confirmation could remove the threat of over $9 billion in forced selling, stabilizing the stock price.