Strategy’s bitcoin-backed preferred stock continues to trade notably below its intended par value, pressured by concerns over dividend sustainability and growing competition from Strive’s SATA product.
Shares of Strategy’s (MSTR) dividend-paying preferred security, STRC, ended Tuesday at $91.79—its third-lowest close since its July 2025 debut—as softer bitcoin prices and balance sheet concerns weighed on sentiment.
The only lower closes occurred later in that same month, when STRC dropped to $88.60. Initially priced around $90, the security was structured to remain close to its $100 par value. However, it has consistently traded below that level and has not returned to par since May 15, the latest ex-dividend date.
Historically, STRC tended to approach its $100 par value ahead of ex-dividend dates—the cutoff after which new investors are no longer eligible for the upcoming payout. After going ex-dividend, the stock would typically decline by roughly the dividend amount before gradually recovering. However, on June 15, the recovery to par never materialized.
Several factors appear to be driving the ongoing weakness.
First, STRC has largely tracked bitcoin’s performance, and the cryptocurrency remains under pressure, trading near $65,000—roughly 50% below its October peak.
Second, concerns have emerged around dividend coverage. After allocating part of its cash reserves to repay $1.5 billion in convertible debt, Strategy now has only about seven months of dividend coverage remaining, down from approximately 24 months prior to the repayment.
At the same time, investor interest has shifted toward a competing offering from Strive (ASST). Its bitcoin-backed preferred security, SATA, continues to trade close to its $100 par value while offering a higher annualized yield of around 13%, compared with STRC’s 11.5%.
SATA also provides daily dividend payouts instead of bi-monthly distributions. Additionally, Strive carries no outstanding debt, placing SATA at the top of its capital structure without obligations to convertible debt holders—an advantage that may appeal to income-focused investors.
As a result, the valuation gap between the two securities has widened significantly. STRC is currently trading at an approximate $8.20 discount to SATA, the largest spread on record, with SATA priced at $99.99.
Based on its current dividend and market price, STRC offers an annualized yield of about 12.53%. This suggests the market may be signaling the need for roughly a 100-basis-point increase in its dividend to restore demand and bring the security closer to its $100 par value.
