MicroStrategy Preferred Stock Slumps Over 10% to Record Low of $88.59
STRC•MicroStrategy’s STRC preferred stock closed at $88.59 on Thursday, marking a record low and down over 10% in one month, with an intraday trough of $82.50. The sub-$100 trading undermines its $100 par-value funding mechanism, straining new share–based Bitcoin purchases on the firm’s 846,842 BTC holdings.
1. Record Low Pricing and Performance
STRC preferred stock plunged to $88.59 on Thursday, its lowest ever closing price, after touching an intraday low of $82.50. The share price has fallen more than 10% over the past month, breaking well below its $100 par value target.
2. Funding Mechanism Strain
The preferred issuance is engineered to trade near $100 so that new share sales can fund Bitcoin purchases. With STRC trading roughly 11% below par, each new share now generates less cash, narrowing the firm’s primary funding channel for its 846,842 BTC holdings.
3. Dividend Obligations and Potential Bitcoin Sales
STRC pays an 11.5% annual dividend for June, the fourth consecutive month at that rate. To restore the $100 peg, the firm may need to raise the dividend—heightening cash obligations—or sell Bitcoin, a move that previously saw a $2 million sale trigger a 20% price drop.
4. Analyst Perspectives
Market observers differ on the slide’s cause. Some view it as a structural funding failure requiring dividend hikes, while others see a technical liquidation cascade; dividend-rate increases to 11.75% or 12% are now expected at month-end.
