Strategy’s STRC Preferred Stock Drops to $80 as Runway Falls to 14 Months
MSTR•Strategy’s STRC preferred stock has plunged to an $80 record discount against $100 par, while its common shares fell below $100 for the first time since March 2024. Cash reserves have shrunk to cover only 14 months of dividend payments after annual obligations surged to $1.2 billion.
1. Funding Model Under Strain
Strategy’s business model relies on Bitcoin reserves, common stock issuance and STRC preferred to fund dividend payments. Bitcoin dipping below $60,000 has pushed common share value under the asset backing, making dilution from equity issuance more severe and stressing the company’s levered structure.
2. Preferred Dividend Burden Grows
Annual cash dividends on STRC preferred have climbed from about $300 million to $1.2 billion, while cash reserves have fallen sharply. The preferred stock trading near $80 versus $100 par reflects market doubts over the company’s ability to meet payments beyond the current 14-month runway.
3. Analysts Urge Budget Reset
Market commentators recommend pausing further Bitcoin purchases to focus on rebuilding liquidity and restore dividend coverage. Potential measures include raising dividend yields, limiting asset acquisitions and securing alternative funding to avoid forced sales and further dilution.
