Strategy's STRC preferred stock has dropped significantly below par value due to market pressures and management decisions, raising concerns among investors.
STRC Sees Significant Decline Due to Bitcoin Market Pressures and Management Decisions
Strategy's preferred stock, known as STRC, has seen a notable decline, dropping below its intended par value of $100 to a low of $83. This represents a 17% decrease, marking the lowest point since its introduction in July 2025.
The downturn has been linked to several factors, including a recent buyback of convertible notes at an 8% discount and the announcement of daily dividends on a competing security, SATA, by Strive Asset Management. Additionally, declining bitcoin prices and waning investor confidence contributed to STRC's struggles.
Initially, STRC was stable, closing at $100 on May 14, when bitcoin was trading above $80,000. However, the situation began to deteriorate as bitcoin prices fell significantly from their October peak of $126,000. Furthermore, Strive's announcement regarding daily dividends added pressure on Strategy, which sought to transition STRC dividends from monthly to semi-monthly to reduce volatility.
On May 15, Strategy announced a $1.5 billion buyback of its 2029 convertible notes, funded partially by a cash reserve intended for dividend and debt obligations. Bitcoin's price continued to decline, reaching $78,000 shortly thereafter.
As bitcoin prices plummeted further, Strategy's actions were scrutinized. By June 5, bitcoin had dipped below $60,000, and STRC fell to a low of $90. On June 8, shareholders approved the shift to bi-monthly dividends, but this did little to stabilize STRC, which continued to decline.
On June 18, STRC briefly dropped below $83, closing at $88.59, as the market faced additional pressures leading into a holiday weekend. Currently, Strategy holds 846,842 BTC, acquired at an average cost of $75,656 per bitcoin, resulting in an unrealized loss of approximately $11.14 billion as bitcoin trades around $62,500.
The overall sentiment surrounding Strategy has turned negative, with its common stock down nearly 80% from its all-time high in November 2024. The pressing concern remains whether STRC can rebound to its par value amidst these turbulent market conditions.
