Strategy's Preferred Stock Drops 25% to Record Low on Bitcoin Dip
STRC•Strategy’s preferred Stretch shares plunged nearly 25% to a fresh record low on Bitcoin dipping under $60,000, intensifying scrutiny of the firm’s capital structure. Executive Chairman Michael Saylor acknowledged volatility tests, as the company’s cash cushion has thinned from $2.25 billion after issuing over $10 billion of preferred stock.
1. Record Low and Sharp Decline
Strategy’s Stretch preferred shares slumped to a new low of $71.25 after markets opened before recovering to $75.30, marking a nearly 25% drop from their engineered trading level.
2. Cash Cushion Erodes Post Issuance
Over the past year, Strategy issued more than $10 billion in its Stretch preferred stock, depleting its cash reserve from $2.25 billion in January to a much thinner buffer for dividends and debt service.
3. Saylor Highlights Volatility Challenge
Executive Chairman Michael Saylor acknowledged that market swings test every capital structure and reiterated focus on disciplined allocation, credit quality and long-term value creation centered on the leading digital asset.
4. Bitcoin Weakness and ETF Outflows
Bitcoin’s price fell roughly 5% over the past week to around $60,000 as intense ETF outflows and a looming $10.6 billion options expiry increased volatility pressure on the preferred shares.
