Technical analysis by Intuit about Symbol MSTRX: Sell recommendation (8/29/2025)

If my wave forecast is correct and BTC trades down toward $23K (ie. 80% log retracement level of the 2023-2025 bull run), MicroStrategy (Strategy) becomes balance sheet insolvent: liabilities (convertible debt + preferreds like STRK/STRF/STRD/STRC) would exceed assets. That doesn’t mean automatic bankruptcy. Their convertibles only cost ~$35M/yr in interest, and even with ~$550–$680M/yr on ~$6.43B at 8–10% in preferred dividends layered on top, they can still cover fixed obligations short-term by liquidating BTC or issuing more equity. That keeps them out of Chapter 11 in the near term. But the trade-off is ugly: Massive dilution from issuing stock at distressed prices, or Selling BTC at $23K just to stay afloat. The real problem is the refinancing wall starting late 2027. With equity wiped on paper and ~$1.1B coming due by early 2028, any refinancing deal will be extremely punitive, handing creditors cheap equity or forcing fire-sale BTC disposals. Market pricing implication: Equity = option value only. Common stock would likely collapse into deeply distressed single digits (<$10), well below NAV, because shareholders sit behind $8.2B in converts and $6.4B+ in high-yield preferreds. So even if BTC really does retrace all the way to $23k, MSTR doesn’t go to $0 right away, but the stock trades like a distressed, over-leveraged call option on Bitcoin, with survival depending entirely on a rebound before maturities hit. BTC Forecast:BTC making new all time highs means that MSTR is likely to follow suit eventually. I still think MSTR could be in serious trouble when a large bear market (> -80%) happens on BTC (which has happened multiple times on BTC historically), but it seems less likely that will happen from this point as BTC charts are turning bullish again.