Strategy’s preferred stock, STRC, designed to maintain a par value of $100, fell to a low of $83 on Thursday, marking a significant decline of 17% since its launch in July 2025. This drop is attributed to a series of events, including a bond buyback and a challenging bitcoin market.
Initially, on May 14, STRC was trading at $100 as bitcoin hovered above $80,000. However, the situation quickly deteriorated as the cryptocurrency’s value began to decline, affecting investor confidence and liquidity. Compounding the issue, Strive Asset Management announced it would pay daily dividends on its competing SATA security, which offers a higher yield of 13%, putting additional pressure on Strategy.
On May 15, Strategy revealed it had repurchased $1.5 billion of its 2029 convertible notes at an 8% discount, funded partially by its cash reserves. This decision, while aimed at managing debt, reduced the cash reserve to $871 million, which was only sufficient to cover six months of STRC dividends, down from the planned 24 months.
As bitcoin prices continued to slide, Strategy made several key moves. On June 1, the company sold 32 BTC, its first sale since 2022, signaling its willingness to liquidate assets to meet obligations. Despite this, the common stock (MSTR) fell by 5.9%, and bitcoin dropped to $71,286.
By June 5, bitcoin had fallen below $60,000 for the first time since October 2024, leading STRC to close at $93.40. The following weeks saw further declines, with STRC trading as low as $88.59 by June 18, coinciding with a broader market downturn.
As of now, Strategy holds 846,842 BTC, acquired at an average price of $75,656 per bitcoin. With bitcoin trading around $62,500, the company faces an unrealized loss of approximately $11.14 billion. The recent capital raises have also faced criticism for being dilutive, further eroding investor confidence.
The ongoing bear market in bitcoin has raised concerns about the viability of STRC returning to its intended par value. Investors are left questioning whether the preferred stock can recover amidst these challenging conditions.
Strategy's preferred stock STRC has experienced a significant decline, dropping to $83 due to a combination of management decisions and a bearish bitcoin market. The company's financial strategies and market pressures have raised concerns about its ability to return to par value.