Strategy is approaching a 28.3 billion dollar issuance cap on its Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC. According to a new report by Delphi Digital, this regulatory ceiling could dictate the pace of the company’s Bitcoin (BTC) acquisitions unless issuance capacity is expanded or the firm relies more heavily on common stock sales.
The STRC instrument has become a primary funding engine for the firm’s treasury. However, researchers point out that if the authorized cap is reached without an extension, the accumulation of digital assets could slow or stop while the obligation to pay dividends on existing shares remains in effect.
This financial vehicle was first introduced by Strategy in July 2025. At that time, the company closed an initial public offering of 2.521 billion dollars in STRC stock. These shares are Nasdaq-listed and pay variable monthly dividends, which as of May 14, 2026, stand at 11.5%. Being perpetual, the company is not required to buy back the stock at a specific date, providing long-term capital structure flexibility.
Despite the importance of STRC, the company has diversified its capital sources. On Monday, Strategy announced purchasing 535 BTC for 43 million dollars. Notably, only about 100,000 dollars of this acquisition was funded through STRC issuance, while the majority (42.9 million dollars) came from sales of Class A common stock (MSTR).
Strategy’s ability to continue issuing stock and buying Bitcoin depends largely on its market net asset value (mNAV). This metric measures the ratio between the company’s enterprise value and the total value of its cryptocurrency holdings. On May 14, 2026, the mNAV stood at 1.25x, down from the 2.11x recorded one year ago.
An mNAV reading above 1 enables the company to issue more stock to fuel Bitcoin acquisitions. If the ratio were to fall below 1, capital-raising capabilities would be constrained. Management has indicated that it will use STRC as its main vehicle as long as the MSTR mNAV stays low, shifting back to common stock sales if the ratio expands again. This strategy follows previous periods where the company reported gains of 17,585 BTC during market fluctuations.
Financial obligations and cash reserves
The company faces a major cash obligation in September 2027. However, projections suggest this will be covered by cash reserves totaling 2.25 billion dollars. According to Delphi Digital researchers, the current financials do not suggest a need for a strategic pullback.
“If management believes the cycle bottom is in, the posture is to lean into BTC accumulation, not pull back,” the report noted regarding the company’s current treasury stance.
Currently, Strategy utilizes its At-The-Market (ATM) equity offering program to service preferred dividend payments. This program, which debuted on March 24, 2026, with a 44 billion dollar capacity, allows for the sale of common or preferred stock directly into the open market. If the mNAV expands, the company could redirect these proceeds toward Bitcoin accumulation, giving the STRC stock issuance limit some breathing room.
This article is for informational purposes only and does not constitute financial advice.
