Key Takeaways
- STRC preferred shares closed Wednesday at $89, representing an 11% discount to the $100 par value and marking the lowest point since its July 2025 debut.
- Strategy has suspended its at-the-market issuance program for STRC, which serves as a primary capital source for bitcoin acquisitions.
- The preferred instrument delivers a variable dividend currently yielding 12.9% annually, with monthly adjustments designed to maintain pricing near $100.
- Strategy liquidated 32 bitcoin worth approximately $2.5 million in late May to cover STRC dividend obligations — marking its first BTC sale since 2022.
- MSTR common shares declined approximately 5% Wednesday, settling at $116.52, while bitcoin traded in the $64,000–$65,000 range.
Strategy (MSTR) experienced a significant decline on Wednesday, with shares falling roughly 5% to close at $116.52, coinciding with its STRC preferred stock plummeting to an unprecedented $89 — representing an 11% discount to its $100 par value.
The Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC, debuted in July 2025 with a mechanism intended to maintain its price near $100 through a high-yield variable dividend structure. Currently, the dividend rate stands at an effective 12.9% annually, subject to monthly recalibration.
Wednesday saw STRC reach an intraday bottom of $88.50 before recovering slightly to close at $89 — still the lowest recorded closing price since its market introduction. This figure falls beneath the initial public offering price of $90.
The significance extends beyond mere price movement. Strategy‘s bitcoin accumulation strategy relies heavily on STRC performance. The company issues new STRC shares through an at-the-market mechanism when trading exceeds $100, channeling proceeds directly into bitcoin purchases. With shares now trading at a discount, this critical funding channel has ground to a halt.
Wednesday’s trading volume for STRC reached $417.5 million, making it Strategy’s most liquid preferred equity instrument.
Bitcoin Liquidation Linked to Dividend Requirements
The STRC situation created ripple effects beyond fundraising capabilities. Late in May, Strategy executed its first bitcoin sale in years, liquidating 32 BTC for roughly $2.5 million to satisfy STRC dividend payment requirements.
This transaction represented a significant policy shift, given Chairman Michael Saylor’s longstanding commitment never to sell the company’s bitcoin holdings. Though analysts from Benchmark and TD Cowen have dismissed concerns about a potential “death spiral” scenario, the sale nonetheless marked a departure from Strategy’s established approach.
Strategy’s bitcoin treasury currently contains approximately 846,842 bitcoin — representing roughly 4% of bitcoin’s fixed maximum supply — establishing the firm as the world’s largest corporate bitcoin holder.
Last week, Strategy disclosed it had established a dedicated $1.1 billion U.S. dollar reserve specifically allocated for preferred dividend payments and debt service obligations. During the same period, the company continued acquiring bitcoin, adding 1,587 BTC through separate common stock offerings.
Broader Market Dynamics
Bitcoin has maintained a trading range between $64,000 and $65,000 this week, coinciding with newly appointed Federal Reserve Chair Kevin Warsh’s inaugural FOMC meeting. The Federal Reserve opted to maintain current interest rate levels on Wednesday.
While STRC has occasionally dipped below par value during periods of bitcoin price turbulence, Wednesday’s closing price appears to establish a new historical low.
For context, SATA — a competing preferred stock product created by Strive to replicate Strategy’s STRC structure — traded above $99 on Wednesday while offering a 13.69% yield.
Strategy’s preferred stock portfolio also includes Stride (STRD), Strike (STRK), and Strife (STRF). Within the capital structure hierarchy, STRC ranks below STRF but maintains seniority over STRD, STRK, and common MSTR shareholders regarding distribution priority.
When STRC launched last year, Saylor characterized it as the company’s “iPhone moment,” signaling what he considered a transformative capital markets innovation.
As Wednesday’s trading concluded, MSTR common stock stood at $116.52, reflecting approximately a 5% daily decline.
