Strategy Sees STRC Preferred Plunge 20% to $80 as Bitcoin Breaks Below $60,000
MSTR•Strategy’s STRC preferred stock fell to about $80, a 20% discount to its $100 par, while common shares dipped below $100 as Bitcoin slid under $60,000. Annual dividend obligations rose to $1.2 billion, shrinking coverage from over seven years to 14 months and prompting calls for $2.8 billion in cash reserves.
1. STRC Preferred Trading at Deep Discount
Strategy’s STRC preferred stock has plunged to roughly $80, trading 20% below its $100 par value, the lowest level on record and signaling waning investor confidence in its credit leg.
2. Dividend Obligations Surge as Cash Runway Shrinks
Preferred dividends have ballooned to about $1.2 billion annually, while cash reserves fell from $2.2 billion at the start of the year to roughly $1.4 billion after repurchasing debt and making small Bitcoin sales, cutting dividend coverage from over seven years to approximately 14 months.
3. Bitcoin Drop Amplifies Equity Leverage
Bitcoin’s slide below $60,000 has pushed Strategy common shares below $100 for the first time since March 2024, intensifying the firm’s leveraged exposure as equity sales become costlier to fund further Bitcoin purchases.
4. Analysts Urge Pause on Bitcoin Buys
Analysts now contend Strategy should halt Bitcoin acquisitions and rebuild reserves to around $2.8 billion to restore two years of dividend coverage, warning that continued asset buys will exacerbate liquidity strain and potential dilution.
