$MSTR Risk Warning: High probability of explosion in Q1 2026

MicroStrategy is using corporate funds to aggressively pursue “quasi-sovereign Bitcoin reserves” without the backing of sovereign credit, which has already reached the limits of mathematics and liquidity. According to the current situation, a significant adjustment may occur in the first quarter of 2026.

1️⃣ Position and Financing Status

• Holds 649,870 BTC, with an average cost of $74,400, a total cost of $48.4 billion, accounting for 3.26% of the circulation.
• Financing method: ultra-low interest convertible bonds 0.42% + floating rate preferred stock 8%-10.5% + high premium additional issuance of shares. The surface design is exquisite, but it actually reaches its peak.

2️⃣ Cash flow completely Ponzi-like

• The annual gross profit of the software business is only 360 million, with preferred stock dividends at 640 million/year, resulting in a shortfall of 280 million.
• Operating cash flow of -45.6 million USD for the first 9 months before 2025, with cash on hand of 54.3 million USD.
• Funds completely rely on borrowing new to repay old, in line with the classic definition of “Ponzi financing.”

3️⃣ Preferred Stock STRC Death Loop

• Floating interest rate + par value protection mechanism: If the stock price drops, the interest rate will be raised, currently 9% → 10.5%, and it may be higher in the future.
• The higher the interest → the more cash burns → can only issue more or sell coins → worse signals → raise interest again. Similar to the 2008 ARS crash.

4️⃣ The solvency of 71 years is an illusion The management's calculations overlooked: large-scale sell-offs that crash the market, 21% corporate tax, selling coins undermining faith, and cross-defaults on convertible bonds.

5️⃣ MSCI Red Line Approaches

• On January 15, Bitcoin accounted for 77% of total assets, far exceeding the 50% red line, and is expected to be removed from the index.
• Passive funds following up, 8-9 billion dollars forced sell-off, stock prices may be halved.

6️⃣ October Flash Crash has been evidenced

• BTC fell by 17%, order book depth decreased by 90%, and price spread widened by 1000 times.
• If MSTR is forced to sell coins, a self-pressuring situation is almost unavoidable.

7️⃣ Corporate Shells Cannot Play Sovereign Games Enterprises must continuously refinance and pay interest; once the market closes, they are forced to sell coins. Financial engineering cannot change the fundamental mismatch.

8️⃣ Three Roads in Q1 2026

• 15-20%: MSCI gives companies a breather for refinancing
• 60-70%: Exclude indices, stock prices halved, orderly deleveraging, slow selling of coins to repay debts.
• 15-20%: Exclude + credit freeze or BTC crash → massive sell-off → MSTR and market double slaughter

📌 Summary: For companies without sovereign credit backing, playing the infinite hoarding of Bitcoin is a high-stakes game. MSTR has exhausted its financial tricks, pushing the window to March 2026, and the countdown begins.