Strategy’s Preferred Stock Slides to $87 as Cash Reserves Fall 38%
STRC•CryptoQuant warns Strategy to halt Bitcoin purchases as cash reserves plunged 38% and annual dividend obligations surged to $1.2B, with STRC trading near record lows around $87.31. Grayscale flags a $1.5B annual cash-flow shortfall as $477M software revenue covers under one-third of preferred dividends, risking further Bitcoin sales.
1. Cash Reserves Squeeze and Dividend Surge
Strategy’s cash reserves have fallen 38% since early 2026 while annual dividend obligations nearly quadrupled to $1.2 billion. Dividend coverage collapsed from over seven years to just 14 months, prompting calls to rebuild reserves to about $2.8 billion for 24 months of coverage.
2. Research Note on Cash-Flow Gap
A research note warns of a structural $1.5 billion annual cash-flow gap as software revenue of $477 million covers under one-third of preferred dividends. The preferred stack has expanded from $730 million to $15.5 billion, with the Stretch preferred carrying a variable ~11.5% coupon that may rise if investors demand higher yields.
3. Preferred Stock Trading Pressure
STRC preferred shares are trading around $87.31, well below the $100 reference value, reducing the attractiveness of new issuances. Strategy’s first Bitcoin sale since 2022—32 BTC at an average $77,135—cut the treasury to roughly 843,706 BTC, signaling reliance on asset sales to meet obligations.
4. Strategic Implications
Limited cash flexibility and growing financing costs could force Strategy to choose between dilutive equity, costly refinancing or further Bitcoin sales at potential losses. Rebuilding cash reserves before additional acquisitions and managing dividend terms are critical to preserving shareholder value.
