Strategy’s STRC Preferred Hits $80 as Dividend Obligations Climb to $1.2B
MSTR•Strategy's STRC preferred shares plunged to ~$80, a 20% discount to $100 par, while common stock slid under $100 for first time since March 2024 as Bitcoin dipped below $60,000. Annual dividend obligations have ballooned from $300 million to $1.2 billion, cutting cash runway from seven years to 14 months.
1. STRC Preferred Plummets
STRC preferred shares have tumbled to around $80, marking a 20% discount to the $100 par value and reflecting eroded confidence in the 11.5% cash dividend. This drop underscores growing investor concern over the company’s ability to maintain payouts as yield expectations rise.
2. Common Stock Engine Falters
MSTR common stock fell below $100 for the first time since March 2024 after Bitcoin dipped under $60,000, undermining the company’s share-sale engine. At depressed prices, raising $500 million requires selling 10 million shares versus 1 million at $500, dramatically increasing dilution and straining shareholder value.
3. Dividend Obligations and Cash Runway
Annual cash dividends have surged from about $300 million in January to roughly $1.2 billion, driven by preferred obligations and debt buybacks. With cash reserves stretched by Bitcoin purchases and sinking trust, the company’s runway for covering dividends has shrunk from over seven years to about 14 months, raising liquidity and solvency concerns.
