MicroStrategy Preferred Stock Slides 26%, Sells 32 Bitcoin to Cover Dividends
MSTR•MicroStrategy’s STRC preferred stock trades around $74, roughly 26% below its $100 par value, with annualized dividends of $1.2 billion and coverage narrowed to 14 months, leading the company to sell 32 Bitcoin in May to fund payments. Bitcoin’s year-to-date decline of over 30% and heavy ETF outflows pressure its treasury holdings, although MicroStrategy reports enough cash to cover preferred dividends for ten months.
1. Preferred Stock Performance
MicroStrategy’s STRC perpetual preferred shares have fallen to about $74, representing a 26% discount to their $100 par value. This gap has widened over 2026 as investor scrutiny of the company’s financing structure intensified.
2. Dividend Obligations and Bitcoin Sales
Annualized dividend obligations tied to STRC have surged to approximately $1.2 billion, and dividend coverage has shrunk from over seven years to just 14 months. In late May, MicroStrategy sold 32 Bitcoin—the first liquidation of its holdings—to meet these payout requirements.
3. Cash Runway and Investor Concerns
The company states it has sufficient cash on hand to fund preferred dividends for another ten months. Despite this, questions persist about the viability of its levered Bitcoin strategy under sustained market pressure.
4. Ripple CEO Critique of Leverage Model
Ripple’s CEO labeled MicroStrategy’s borrow-to-buy approach a “damning indictment,” arguing that heavy leverage adds market pressure without driving long-term utility or value for the digital asset.
