CoinTelegraph
Strategy paid off $1.5 billion in convertible debt earlier this year using cash reserves, a move that simplified the capital stack but cut dividend runway for STRC holders from roughly 24 months to about 7 months. The company's cash reserve now sits near $871 million, against a security that needs to support an annualised dividend yield rising to 12% in July with further bumps likely in August.
STRC closed Tuesday at $91.79 — its third-lowest close since the preferred stock launched in July 2025. The chart tells a repeating story: price spikes toward par into each monthly ex-dividend date, then bleeds lower as traders who bought for the dividend exit the day after. The predictable monthly cadence has become a structural feature of the trade, not a bug.
Why it matters
Strategy has already approved semi-monthly payments in an attempt to smooth that volatility, but competitor Strive — which issues its own preferred stock called SATA — went further and switched to daily dividend payments, eliminating the monthly ex-dividend window entirely. The more consequential difference is the balance sheet: Strive carries zero debt and more than 18 months of SATA dividend coverage in cash and marketable securities, against Strategy's roughly 7-month cushion.
For preferred holders, runway length is the entire thesis. A 7-month cushion at a 12% yield means the market is pricing in non-trivial odds that Strategy has to issue new equity, sell BTC, or let STRC trade closer to its intrinsic floor before coverage rebuilds.
Market impact
The pricing pressure is asymmetric. If BTC recovers, new buyers have less incentive to absorb STRC's depeg at current prices because the dividend yield gets competed away; if BTC falls further, the runway question gets worse faster. Either direction, the comparison trade to a debt-free competitor paying daily dividends — at a thinner implied yield but with longer coverage — is what the marginal preferred buyer now does.
STRC's path back to par depends on Strategy rebuilding the cash buffer faster than the dividend clock runs out.
Frequently asked questions
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Why is STRC trading below par right now?
STRC closed at $91.79 on Tuesday — its third-lowest close since launch — because the predictable monthly ex-dividend cycle and a thinned cash cushion have made the trade less attractive to preferred buyers at the current price.
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How did Strategy's $1.5B debt paydown affect STRC holders?
Using cash reserves to repay $1.5B in convertibles cut STRC's dividend runway from roughly 24 months to about 7 months, signalling to preferred holders that the cash buffer behind their dividends is materially thinner than it was.
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How does Strive's SATA preferred compare to STRC?
SATA pays daily dividends instead of monthly, eliminating the ex-dividend volatility STRC shows on the chart. Strive also carries zero debt and holds more than 18 months of SATA dividend coverage in cash and marketable securities.
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What dividend rate is STRC about to pay?
Strategy plans to raise STRC's dividend rate to 12% in July, with further increases likely in August, as the company tries to keep the preferred attractive against a shrinking coverage cushion.
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Could STRC return to par?
A return to par depends on Strategy rebuilding the cash buffer faster than the dividend clock runs out — and on BTC not falling further, which would extend the timeline by making the depeg harder for new buyers to absorb at current prices.
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