A combination of bond repurchases, declining cash reserves, and a weakening bitcoin market triggered a chain of events that pushed STRC away from its $100 par value and fueled broader market scrutiny.
STRC, a dividend-paying preferred equity issued by bitcoin treasury firm Strategy (MSTR), is structured to trade at par—but in reality, it has struggled to maintain that level.
On Thursday, the stock fell below $83, roughly 17% under par and its lowest point since its July 2025 debut. The security was designed to deliver high yield with limited volatility.
Holding near $100 is critical for Strategy, as it enables efficient capital raising through at-the-market (ATM) offerings that fund its 11.5% annual dividend.
In recent weeks, however, falling bitcoin prices and a series of corporate actions have driven STRC well below target. Here’s a timeline of the decline:
May 14: STRC closed at $100 ahead of its ex-dividend date, while bitcoin traded above $80,000. Despite the surface stability, bitcoin was already well below its $126,000 peak, and STRC had only briefly held par leading into the dividend date. Meanwhile, Strive Asset Management introduced daily dividends for its competing SATA product, which offers a higher 13% yield—intensifying pressure on Strategy.
May 15: Strategy announced a $1.5 billion buyback of its 2029 convertible notes at an 8% discount. The move was partly funded by a cash reserve originally set aside for dividends and debt obligations, though this wasn’t disclosed initially. Bitcoin slipped to $78,000.
May 18: Strategy purchased 24,869 BTC as bitcoin declined toward $76,000.
May 26: The company confirmed it had tapped its cash reserve for the bond buyback, reducing the fund to $871 million—about six months of dividend coverage, down from a prior 24-month target. STRC traded near $99 as bitcoin hovered around $77,000.
June 1: Strategy sold 32 BTC—its first sale since 2022—signaling a willingness to liquidate assets if needed. Though minimal in size, the move unsettled markets: MSTR shares dropped 5.9%, and bitcoin slid to around $71,000. STRC closed at $98.07.
June 5: Bitcoin fell below $60,000 for the first time since October 2024, closing near $61,000. STRC dropped sharply, hitting $90 before settling at $93.40.
June 8: Shareholders approved a shift to semi-monthly dividends. Strategy also bought 1,550 BTC and reported its cash reserve had rebounded to $1 billion.
June 15: Another purchase of 1,587 BTC lifted the reserve to $1.1 billion.
June 18: STRC briefly fell below $83 before closing at $88.59 ahead of a U.S. market holiday. Bitcoin dropped 2.4% to about $62,880. Strive’s CEO attributed the decline to leverage-driven liquidations rather than weakening fundamentals.
Strategy now holds 846,842 BTC at an average cost of $75,656, implying an unrealized loss of roughly $11 billion at current prices.
At the same time, recent capital raises have been viewed as dilutive, drawing investor criticism. MSTR shares trade around $112, down about 80% from their November 2024 peak.
All of this has unfolded against the backdrop of a bitcoin bear market, eroding confidence not only in the asset but also in the financial structures built around it.
The key question now: can STRC recover and return to its $100 par value?
