Strategy’s Preferred Dividend Covered by $2.21B Cash Buffer; Probe Launched
MSTR•Strategy’s $2.21 billion cash buffer covers its preferred dividend for 10 months after selling 32 BTC for $2 million, yet STRC trades at $77 and common shares fell 8% June 25. Rosen Law Firm opened a probe into its Bitcoin strategy while CryptoQuant urges pausing buys to rebuild reserves.
1. Cash Reserves and Dividend Coverage
Strategy reports $2.21 billion in U.S. dollar reserves, sufficient to fund its high-yield preferred stock dividend for 10 months. The company sold 32 BTC at end-May, raising $2 million to bolster payouts amid growing payout obligations.
2. Preferred Shares Under Pressure
STRC preferred shares, yielding over 12% with twice-monthly dividends, have broken their $100 par value and fallen 23% in June to $77. Common shares dropped 8% on June 25 as investors question the funding model.
3. Rosen Law Firm Investigation
Rosen Law Firm launched a probe into whether Strategy and certain executives made materially misleading statements about its business operations, Bitcoin treasury strategy, profitability and accumulation risks. Investors in multiple securities have been invited to join a potential class action.
4. CryptoQuant Funding Warning
CryptoQuant recommends pausing new Bitcoin purchases and rebuilding cash reserves to strengthen dividend coverage. The firm warns that as Bitcoin holdings grow and financing relies on preferred shares, the cash buffer supporting dividends has weakened and risks becoming strained.
