MicroStrategy Preferred Stock at 26% Discount as BTC Sale Funds $1.2 Billion Dividends
MSTR•MicroStrategy’s STRC perpetual preferred stock trades around $74, a 26% discount to its $100 par value, while annual dividend obligations have surged to $1.2 billion and coverage has narrowed to 14 months. The company sold 32 BTC in late May to meet dividend payments, marking its first Bitcoin liquidation and intensifying scrutiny of its leverage-based accumulation approach.
1. Discounted Preferred Stock Raises Concerns
MicroStrategy’s STRC perpetual preferred stock has slid to roughly $74, about 26% below its $100 par value, reflecting growing investor unease. Annualized dividend payments tied to STRC now total approximately $1.2 billion, and the dividend coverage window has contracted from over seven years to just 14 months.
2. Bitcoin Liquidation Fuels Scrutiny
In late May, MicroStrategy sold 32 BTC—its first-ever Bitcoin liquidation—to cover preferred dividend payments. This move has drawn scrutiny from analysts and investors worried about the sustainability of its borrow-to-buy strategy under mounting financial obligations.
3. Ripple CEO Critiques Leverage Strategy
Ripple CEO Brad Garlinghouse criticized MicroStrategy’s leveraged Bitcoin model as a “damning indictment,” arguing that long-term value stems from utility rather than financial engineering. He reiterated his bullish view on Bitcoin itself while distancing it from firms that rely heavily on debt to accumulate the asset.
