Strategy’s STRC Preferred Drops 20% to $80 While Stock Falls Under $100
MSTR•Strategy’s STRC preferred plunged to $80, a 20% discount to $100 par, while common shares dipped below $100 for first time since March 2024. Bitcoin’s drop under $60,000 and rising dividend obligations to $1.2 billion have slashed cash runway from seven years to 14 months.
1. Triad Structure Under Pressure
Strategy’s model relies on three interlocking assets: Bitcoin reserves, common stock used to fund purchases, and STRC preferred with an 11.5% cash dividend. Weakness in any leg now strains the others, exposing mismatches between income needs and non-yielding Bitcoin holdings.
2. Market Movements and Discounts
As Bitcoin fell below $60,000, STRC preferred sank to around $80, a 20% discount to its $100 par, and common shares dropped under $100 for the first time since March 2024, reflecting leverage to Bitcoin’s decline.
3. Cash Runway and Dividend Obligations
Annual dividend obligations surged from about $300 million in January to $1.2 billion, reducing cash runway from over seven years to roughly 14 months. This erosion raises doubts over Strategy’s ability to meet future payouts without further asset sales or dilution.
