James Anderson didn't panic when his shares of the bitcoin-hoarding firm Strategy went into a free fall this summer. Instead, he doubled down on his positions, which had recently been at around $100,000.

His holdings are now at around $62,000, including Strategy's common stock and related options contracts and exchange-traded funds.

"There's that quote 'buy when there's blood in the streets,'" said Anderson. "But the part people often leave out is, 'even when it's your own blood.' So if I'm feeling like I'm bleeding, then it's probably a good time to buy."

Anderson, 37 years old, is among Strategy's fervent fan base who are sticking by the firm despite its shares sliding 36% this year, along with bitcoin's steep declines. Some investors can't resist the prospect of amplifying short-term gains in bitcoin or collecting dividends on Strategy's preferred shares, while others are simply die-hard believers in bitcoin and think the cryptocurrency will emerge from its latest winter.

Strategy, which Michael Saylor founded in 1989, underwent its latest transformation in recent years from a software company into one of the world's biggest stockpiles of bitcoin. Its fortunes climbed along with bitcoin prices, inspiring dozens of imitators that sell shares or borrow money to fund their bitcoin acquisitions. Now bitcoin's selloff is forcing Strategy to reassure investors.

Last month, Strategy unveiled a turnaround plan that included buying back stock and selling bitcoin -- something Saylor had urged people never to do.

Shares of Strategy and its biggest dividend-paying preferred stock, Stretch, have reversed some losses since the plan was announced. Still, the common stock is nearly 80% off its record high in 2024, while Stretch is 12% below its par value of $100.

Some Strategy fans have faith Saylor will be able to get the company back on its footing.

The company recently raised $216 million from offloading 3,588 bitcoin to fund dividends on its preferred stock. And this week, Strategy said it has boosted its cash reserve -- meant for paying dividends on preferred stocks and interest on outstanding debt -- to $3 billion.

Brad Long, a bitcoin financial coach based outside of Atlanta, said he purchased roughly $10,000 of Stretch late last year to see if its dividends could serve as a viable income generator in retirement.

The 54-year-old remains a staunch bitcoin advocate, and was unfazed during the multiweek recent selloff in Strategy and Stretch. He welcomed the company's turnaround plan, which included hiking the dividend on Stretch preferred shares from 11.5% to 12% to make them more attractive to investors.

"From an income perspective, if we did have $500,000 worth of Stretch, it actually would be a little bit better now," Long said.

Skeptics say Strategy and its investors are playing with fire. They point to the company's struggle to balance the conflicting demands of common shareholders, preferred stockholders and the broader bitcoin community. Meanwhile, bitcoin has roughly halved since reaching a peak in October last year, hurting the value of Strategy's stash, which is now valued at about $54 billion.

Anderson, the Strategy investor who doubled down on his holdings in June, also owns 400 shares of Stretch worth about $35,200. He said he views Stretch as an income generator, but doesn't see it as a bond substitute.

"I still have a high-risk portfolio that I would not recommend for most people," he said. "Right now, I'm still in hyper growth mode, even though I'm retired."

Anderson splits his time between Japan and Indonesia, and said he was able to retire a few years ago after investing in bitcoin, ether and precious metals.

The recent volatility has alienated other investors.

Dimitri Semenikhin, a real-estate developer in Dubai, said he offloaded the majority of his $5 million stake in Stretch after deciding it had gotten too risky.

The 29-year-old investor initially bought Stretch when Strategy had issued only about $2 billion worth of preferred shares against roughly $60 billion in bitcoin holdings. Over time, Strategy issued far more Stretch shares, even as its bitcoin holdings devalued. He said that raised both Stretch's leverage and risk profile.

Write to Vicky Ge Huang at vicky.huang@wsj.com

(END) Dow Jones Newswires

July 16, 2026 14:51 ET (18:51 GMT)

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