TLDR
- Strategy’s preferred stock STRC dropped to an intraday low of $83, around 17% below its $100 par value — the lowest since its July 2025 debut.
- A $1.5 billion convertible note buyback drained Strategy’s cash reserve from a planned 24 months of dividend coverage to roughly 6 months.
- Bitcoin has fallen from above $80,000 in May to around $62,500, leaving Strategy sitting on an unrealized loss of approximately $11.14 billion on its BTC holdings.
- Michael Saylor defended the company’s position, stating BTC and USD reserves now exceed debt by around $48 billion.
- Critics including Peter Schiff have raised fraud allegations, while supporters argue STRC’s structure is sound if Bitcoin recovers long-term.
Strategy’s preferred stock STRC fell to a record intraday low of $83 on June 18, closing at $88.59 — roughly 17% below its $100 par value target. The stock debuted in July 2025 and was designed to trade at or near par, offering an annualized yield of 11.5%.
The drop didn’t happen overnight. It was the result of a chain of decisions and a deteriorating bitcoin price over the past several weeks.
On May 14, STRC was holding at $100 heading into its monthly ex-dividend date, with bitcoin trading above $80,000. On the surface, things looked fine. But bitcoin was already well below its October 2024 record of $126,000.
That same day, rival Strive Asset Management announced its competing preferred security, SATA, would begin paying daily dividends at a 13% yield — putting immediate pressure on Strategy to match up.
The Bond Buyback That Shook the Reserve
On May 15, Strategy announced it was repurchasing $1.5 billion of its 2029 convertible notes at an 8% discount. The company funded part of that deal using a cash reserve that had been set aside specifically to cover dividend and debt payments.
That detail wasn’t disclosed right away. When it came out on May 26, the reserve had fallen to $871 million — dropping coverage of STRC dividends from a stated target of 24 months down to roughly 6 months.
STRC dropped to $99.33 that day. Bitcoin was trading around $77,000.
Meanwhile, Strategy continued buying bitcoin. On May 18, it picked up 24,869 BTC as the price slid toward $76,000.
June 1 brought another surprise. Strategy sold 32 BTC — its first bitcoin sale since 2022. The sale was tiny, just 0.0038% of holdings, but the signal spooked the market. MSTR dropped 5.9% that day. Bitcoin fell to as low as $70,500. STRC closed at $98.07.
Bitcoin’s Slide Accelerates the Pressure
By June 5, bitcoin had broken below $60,000 for the first time since October 2024. STRC dropped to as low as $90 before closing at $93.40.
Strategy’s shareholders approved a move to semi-monthly STRC dividend payments on June 8, a change designed to reduce price swings around ex-dividend dates. The company also reported its dollar reserve had climbed back to $1 billion after buying 1,550 BTC.
On June 15, it added another 1,587 BTC. The reserve stood at $1.1 billion.
Then came June 18. STRC hit $83 intraday before closing at $88.59 as bitcoin fell 2.4% to $62,880. Strive CEO Matt Coles, whose own SATA also fell, attributed the slide to leverage-driven liquidation rather than any structural credit problem.
Strategy now holds 846,842 BTC, acquired at an average cost of $75,656 per coin. With bitcoin at around $62,500, the company is carrying an unrealized loss of approximately $11.14 billion.
MSTR common stock trades around $112, down roughly 80% from its November 2024 all-time high.
Michael Saylor pushed back against critics this week, posting on X that BTC and USD reserves now exceed the company’s debt by around $48 billion. He contrasted the current position with 2022, when debt briefly exceeded reserves by $300 million and BTC traded near $20,000.
Peter Schiff has called for an investor lawsuit and suggested Saylor may have violated SEC marketing rules in promoting STRC. Bitcoin advocate Samson Mow called STRC a “brilliant instrument,” arguing there is nothing structurally wrong with it unless you believe bitcoin won’t appreciate long term.
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