Ripple CEO Slams MicroStrategy’s Leverage as STRC Trades 26% Below Par
MSTR•MicroStrategy's STRC preferred stock trades at $74, a 26% discount to $100 par as annual dividends climbed to $1.2 billion and coverage narrowed from seven years to 14 months. Brad Garlinghouse maintained his Bitcoin bullishness while criticizing MicroStrategy's leverage-driven model after it sold 32 BTC to fund STRC dividend payments.
1. STRC Trading and Discount
MicroStrategy’s STRC perpetual preferred shares are trading around $74, reflecting a 26% discount to the $100 par value as investor concern mounts over the company’s mounting obligations and market pressures.
2. Dividend Obligations
Annualized dividends tied to STRC have risen to approximately $1.2 billion, while the dividend coverage window has contracted sharply from more than seven years to roughly 14 months, raising questions about long-term sustainability.
3. Bitcoin Sale to Fund Dividends
In late May, MicroStrategy sold 32 BTC—the first liquidation of its Bitcoin holdings—to cover STRC dividend payments, underscoring the growing strain on its capital structure and reserve management.
4. Ripple CEO Critique
Brad Garlinghouse reaffirmed his long-term bullish stance on Bitcoin but labeled MicroStrategy’s borrow-to-buy strategy a 'damning indictment', arguing that financial engineering without underlying utility generates undue market pressure.
