MicroStrategy Preferred Stock at $74, Dividend Coverage Window Slashed to 14 Months
MSTR•MicroStrategy’s STRC preferred stock trades around $74, about 26% below its $100 par value, while its dividend coverage window has shrunk from over seven years to 14 months. Management sold 32 BTC to meet payouts and states it can fund preferred dividends for 10 more months.
1. Preferred Stock Trading Below Par
MicroStrategy’s STRC perpetual preferred shares have fallen to approximately $74, reflecting a 26% discount to their $100 par value. The steep decline underscores investor concern over the company’s leveraged Bitcoin accumulation strategy and its growing financial obligations.
2. Dividend Coverage and BTC Sale
The company’s annualized dividend obligations on STRC have surged to roughly $1.2 billion, cutting the dividend coverage window from more than seven years to about 14 months. In late May, management sold 32 BTC to fund dividend payments, marking the first asset liquidation for that purpose.
3. Cash Runway for Dividends
Despite the mounting yield burden, MicroStrategy reports it holds sufficient cash reserves to cover STRC dividend payments for the next 10 months. This assertion aims to reassure investors amid continued pressure on the preferred stock’s market price.
