Key Takeaways:
Strategy's Bitcoin-backed preferred stock has traded 8.2% below its $100 par value since mid-April, the longest discount streak since its July 2025 debut.
STRC, Strategy's variable-rate perpetual preferred stock, fell 3.58% to $91.79 on Tuesday, its third-lowest close since listing in July 2025, as Bitcoin weakness and dividend coverage concerns weighed on the security.
"The market is pricing a direct conflict between Saylor's Bitcoin accumulation strategy and the cash obligations owed to preferred shareholders," Nick Ruck, director at LVRG Research, said.
The security has traded below its $100 par value since April 15, a month-long stretch that has limited Strategy's ability to issue new shares through at-the-market programs. Bitcoin fell 2.5% overnight to around $65,000, while Strategy's use of cash reserves to repay $1.5 billion of convertible debt in May reduced dividend coverage from 24 months to roughly seven months, according to the company's investor materials.
The structural bind threatens Strategy's primary funding mechanism for Bitcoin purchases. Every dollar deployed into BTC is a dollar not held in reserve for STRC's 11.5% dividend, and with $21 billion in total debt obligations, the market is demanding a higher yield — estimated at roughly 100 basis points above the current rate — to restore STRC to its par value.
SATA Widens the Gap
Strive's competing preferred security, SATA, trades at $99.99 — effectively at par — while offering a 13% annualized yield with daily dividend payments. STRC pays bi-monthly. The $8.20 spread between the two is the largest on record, according to TradingView data. Strive carries no debt, placing SATA at the top of its capital structure, while STRC sits beneath $21 billion in Strategy obligations.
MSTR Feels the Same Pressure
Strategy's common stock fell 6.35% to $122.81 on Tuesday, extending a 67% decline over the past year. The premium investors once paid for MSTR as a leveraged Bitcoin proxy has collapsed from 2.4 times net asset value in late 2024 to roughly 1.1 times by January 2026. In early June, the company sold 32 Bitcoin for $2.5 million — its first sale since 2022 — challenging the narrative that its Bitcoin holdings were never to be sold.
This article is for informational purposes only and does not constitute investment advice.
