CoinDesk
Strategy's dividend-paying preferred equity STRC, built to anchor at $100 in par value, dropped to an intraday low of $83 this week — roughly 17% below target and the weakest level since the security's July 2025 debut. The slide came alongside a broader bitcoin drawdown that pushed BTC to around $62,500, leaving Strategy sitting on an unrealized loss of approximately $11.14 billion across its 846,842-coin treasury. The company's common stock MSTR has fallen roughly 80% from its November 2024 all-time high to trade near $112.
Why it matters
Keeping STRC near par matters because par is the mechanical prerequisite for Strategy's at-the-market equity issuance — the mechanism that funds the security's 11.5% annualized dividend and, by extension, the company's continued bitcoin accumulation. The May 15 buyback of $1.5 billion in 2029 convertibles at an 8% discount was meant to extend debt maturities, but it drew down a dollar reserve originally sized for 24 months of dividend coverage to roughly six months — a number Strategy only confirmed on May 26. Compounding the squeeze, Strive's competing SATA began paying a 13% daily dividend on May 14, putting structural yield pressure on STRC the same day it was already losing its grip on par.
Market impact
The timeline reads as a sequence of compounding stress signals: a $1.5B convertible buyback partially funded from the dividend reserve, a 24,869-BTC add at $76K, a 32-BTC sale on June 1 — Strategy's first since 2022 — that nonetheless knocked MSTR down 5.9%, and BTC's slide through $60K on June 5. The June 8 vote to move STRC dividends to a semi-monthly cadence bought some stability, but June 18's drop to $83 intraday suggests the market is no longer pricing STRC as a par-anchored instrument. With the dollar reserve at $1.1 billion and BTC hovering near cost basis, the next decisive test is whether STRC can hold above the levels at which ATM issuance starts to compound the equity's dilution problem rather than relieve it.
Frequently asked questions
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What is Strategy's STRC preferred stock and why does par matter?
STRC is a dividend-paying preferred equity issued by Strategy (MSTR), designed to anchor at a $100 par value. Par is critical because it allows Strategy to issue equity at-the-market to fund the 11.5% annualized dividend and continued bitcoin accumulation.
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What caused STRC to lose its par value?
The slide combined a $1.5B convertible-note buyback that drew the dollar dividend reserve down to six months of coverage, Strive launching a 13% daily dividend on competing SATA, and bitcoin falling through $60,000 — all of which weakened investor confidence in the capital structure built around MSTR's BTC treasury.
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How large is Strategy's unrealized bitcoin loss now?
Strategy holds 846,842 BTC acquired at an average cost of $75,656 per coin. With BTC trading near $62,500, the unrealized loss sits at approximately $11.14 billion.
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Why did Strategy sell bitcoin for the first time since 2022?
On June 1, Strategy sold 32 BTC — a token amount meant to signal willingness to tap the treasury to fund dividend obligations if needed. The sale knocked MSTR down 5.9% on optics, even though it represented just 0.0038% of holdings.
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What would it take for STRC to recover and return to par?
STRC would need a combination of bitcoin price stabilization near or above Strategy's cost basis, a rebuilt dollar reserve closer to the 24-month dividend coverage target, and a narrowing of the yield gap with competing products like Strive's SATA.
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