MicroStrategy’s Preferred Stock Plunges 26% Below Par Under $1.2B Dividend Strain
MSTR•MicroStrategy's preferred stock trades at $74, 26% below $100 par value, as dividend obligations rose to $1.2 billion and coverage shrank from over seven years to 14 months. It sold 32 Bitcoin in May to fund payments, prompting Ripple CEO to call Saylor's leveraged accumulation a “damning indictment” despite Bitcoin bullishness.
1. STRC Trading at Discount
MicroStrategy’s STRC perpetual preferred stock is trading near $74, representing a roughly 26% discount to its $100 par value as investors weigh the company’s mounting financial obligations.
2. Dividend Burden Rises
Annualized dividend payments tied to STRC have climbed to about $1.2 billion, while the dividend coverage window has contracted from over seven years to approximately 14 months, raising concerns over sustainability.
3. First Bitcoin Liquidation
In late May, MicroStrategy sold 32 Bitcoin—the first liquidation of its holdings—to fund STRC dividend payments, marking a shift in its typically accumulation-focused strategy.
4. Ripple CEO Highlights Utility vs Leverage
Ripple CEO Brad Garlinghouse described MicroStrategy’s borrow-to-buy model as a “damning indictment,” emphasizing that long-term digital asset value is driven by utility rather than financial engineering.
