Analyst Adam Livingston says a three‑year stress test on Strategy’s MSTR stock shows no “death spiral” but warns that Bitcoin value per share could still collapse. His model centers on how much BTC backs each common share if markets turn against the company and funding dries up.
He starts with Bitcoin near $59,000, MSTR around $88, and mNAV at 1.40x. In the stress case, BTC falls to 26,611 dollars by month six; Strategy’s market‑value‑to‑net‑asset‑value multiple drops below 0.50; and new debt or equity is no longer available.
Once cash runs out, the company must sell BTC to cover senior obligations. Livingston assumes cash is gone by month nine, forcing Strategy to sell 115,727 BTC over the next three years to meet debt payments.
Meanwhile, the claim ratio on assets for common shareholders jumps from 41.5% to 96.7%. That higher ratio indicates how much of the balance sheet remains after common equity, preferred layers, and senior debt are covered in the stress scenario.
What Happens to BTC Per Share and the Stock Price
The key result is a steep drop in Bitcoin backing each common share. Livingston says common equity BTC per share falls about 94%, from 138,161 satoshis to 7,884 satoshis.
His model also shows Strategy share price sliding from tens of dollars to nearly zero. In the worst case, he estimates the stock at about 1.01 dollars, reflecting lower BTC per share and weaker confidence in the treasury strategy.
Even after selling BTC to repay senior debt, the company still holds a large balance. Livingston’s stress test ends with Strategy keeping 731,636 BTC and mNAV returning to roughly 1.40 times, suggesting the balance sheet survives in leaner form.
Livingston says the main risk is “compression in common equity BTC per share,” not instant bankruptcy. He argues that talk of a sudden “death spiral” overstates the danger because the firm retains substantial BTC even after forced sales.
Instead, the stress case underscores how painful dilution could be for common shareholders if Strategy sells Bitcoin into a weak market while the stock trades below net asset value. In his view, the key question is how much BTC each share represents after several hard years, rather than whether the company disappears overnight.
READ MORE: The Great IPO Unwind: Why SpaceX, Cerebras, Circle, and Figma Stocks are Sinking
