How much longer can MicroStrategy sustain its "sell stock to buy BTC" strategy? Delphi Digital warns: If BTC trades sideways, a debt snowball crisis may loom.

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What is the limit for Michael Saylor? Renowned institution Delphi Digital released a major in-depth report on MicroStrategy (MSTR) today, pointing out that the premium "equity issuance for Bitcoin" dividend it previously relied on is fading. Today, MicroStrategy's main engine for buying Bitcoin has shifted to a new tool, "STRC," which offers an 11.5% annualized dividend. However, this strategy of "trading tomorrow's dividends for today's Bitcoin" is saddling the company with increasingly heavy, persistent debt. With the 2028 debt wall approaching and a $28.3 billion issuance cap, MicroStrategy's Bitcoin-buying engine is facing an unprecedented stress test. (Previous coverage: Trust math, not ideology: MicroStrategy CEO defines the only condition for selling BTC) (Background: Terrifying! Michael Saylor: MicroStrategy may sell BTC to pay dividends; Strategy Q1 loss of $12.5 billion) Is the business model of MicroStrategy (MSTR) frantically devouring Bitcoin approaching its structural limit? Renowned cryptocurrency research institution Delphi Digital released its latest in-depth report today (12th) titled "How Far Can Saylor Stretch It," comprehensively deconstructing MicroStrategy's current Bitcoin accumulation model and pointing out major potential financial concerns. Over the past few years, MicroStrategy's Bitcoin purchasing power has primarily benefited from its massive Equity Premium. When MSTR's stock price is significantly higher than the net asset value of the Bitcoin it holds, the company can easily achieve accretion in "BTC per share" simply by issuing new shares to buy Bitcoin. However, Delphi Digital points out that this magic is wearing off. Currently, MSTR's EV-based mNAV has dropped to approximately 1.24x. This figure means that the benefits of issuing common stock are approaching the break-even point, and MicroStrategy can no longer rely on a clean and efficient path to increase BTC per share as it did in the past. With the reduced effectiveness of common stock issuance and the $8.2 billion principal repayment pressure left by past Convertibles, MicroStrategy has shifted its strategic core to a new financing tool: STRC. Delphi Digital explains that STRC allows MicroStrategy to reach "yield-seeking buyers." These investors are not looking for the upside potential of MSTR's stock price, but rather the 11.5% annualized dividend (paid monthly) provided by STRC. In this way, MicroStrategy can continuously invest financing proceeds into Bitcoin without adding further maturity pressure from convertible bonds. However, there is no such thing as a free lunch. The essence of STRC is "trading tomorrow's dividend obligations for today's Bitcoin." Delphi Digital warns: "If the price of Bitcoin rises and MSTR's premium is maintained, this structure can absorb the costs; but if Bitcoin enters a sideways consolidation, the company's cumulative obligations will grow, and the efficiency of issuing common stock to pay dividends will become lower." The extreme stress test for this gamble lies in: Can the speed of Bitcoin purchases funded by STRC outpace the speed at which common stock must be issued to pay preferred dividends? The report concludes by pointing out two clear "time and space boundaries" facing MicroStrategy: - Approaching Debt Wall: Repayment pressure from convertible bonds will begin to emerge in September 2027. MicroStrategy's current cash reserve of $2.25 billion is sufficient to cover the approximately $1 billion put option in September 2027. While this buys time, the company still needs to provide answers regarding the much larger debt wall in 2028. - Issuance Cap: The authorized issuance cap for STRC is $28.3 billion. Before this cap is reached, MicroStrategy can continue to buy BTC and offset the dilution caused by dividends. But if the issuance limit cannot be extended in the future, hitting the cap would mean the "Bitcoin-buying hedge mechanism" might be forced to slow down or stop, while the massive dividend obligations will remain forever.

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