MicroStrategy Shares Fall Below $100 as STRC Preferred Stock Trades 16% Discount
MSTR•MicroStrategy’s shares fell below $100 for the first time since March 2024 and its variable-rate perpetual preferred stock (STRC) traded near $84, a 16% discount to par. Firm holds 847,363 BTC worth about $53 billion and $1.4 billion cash against $1.2 billion in annual dividends, with $2.8 billion needed to rebuild 24 months coverage.
1. Stock and Preferred Share Performance
MicroStrategy’s common shares dropped below $100 for the first time since March 2024. Meanwhile, STRC traded near $84, representing a 16% discount to its $100 par value. This discount raises funding costs and undermines confidence in the preferred share’s yield stability.
2. Bitcoin Holdings and Cash Reserves
The company holds 847,363 BTC, valued at roughly $53 billion, alongside $1.4 billion in cash reserves. These cash reserves funded partial BTC acquisitions and dividend distributions. However, dipping below key par thresholds signals strain on balance sheet liquidity.
3. Dividend Obligations and Coverage Gap
Annualized dividend commitments total about $1.2 billion, pushing dividend coverage down to roughly 14 months. Restoring a more conservative 24-month buffer would require approximately $2.8 billion in reserves. The shrinking coverage heightens pressure on the company’s variable-rate dividend mechanism.
4. Analyst Recommendations
CryptoQuant head Julio Moreno recommended pausing further Bitcoin purchases until cash reserves and dividend coverage improve. Benchmark analyst Mark Palmer maintained a Buy rating and $570 target, viewing the STRC discount as a market-driven yield reset rather than structural failure. Investors will watch capital flexibility closely.
