Strategy Inc’s STRC preferred stock, the variable-rate instrument designed to trade near its $100 par value, has fallen to roughly $85. That is a record low for the security, which launched less than a year ago at $90 per share and was supposed to hover around par thanks to a self-adjusting dividend mechanism.
What happened to STRC
STRC, formally known as the Variable Rate Series A Perpetual Stretch Preferred Stock, debuted in late July 2025. Strategy sold over 28 million shares at $90 each, raising capital to fund what the company does best: buy Bitcoin and tell everyone about it.
The product’s core selling point was a variable dividend rate that adjusts monthly. If the stock drifts below par, the dividend ticks up to lure buyers back. If it trades above par, the rate falls.
The dividend started at 9% annualized. It has since climbed to 11.50% annualized as of June 2026. At a trading price around $86, that 11.50% rate on a $100 par translates to an effective yield of roughly 13.33%.
The stock previously closed at lows of approximately $89 on June 17-18, before continuing its descent toward the current $85 range. Early post-launch, STRC briefly dipped to $88.60 before recovering, and it was trading around $94.60 as recently as early June 2026.
Why the mechanism is failing
Strategy carries a $6.7 billion debt burden. The preferred stock dividends, including those paid on STRC, are not backed by any specific collateral. They are not secured by Bitcoin. They are claims on residual company assets, funded through operational revenue and ATM equity sales.
ATM equity sales mean Strategy is issuing new common shares to raise cash. The company made notable Bitcoin purchases in May 2026, acquiring over 11,700 BTC. Those purchases were enabled by heavy trading volumes and capital raises. But the same mechanism that funds Bitcoin buying also funds dividend payments.
Competition hasn’t helped either. Products like Strive’s SATA have entered the market offering yield-oriented exposure to digital assets, giving investors alternatives that didn’t exist when STRC launched.
What this means for investors
At $85 per share with an 11.50% dividend rate on $100 par, the effective yield is north of 13%. The preferred stock is structurally junior to Strategy’s $6.7 billion in debt. In a stress scenario, preferred shareholders would be behind bondholders in the recovery queue.
The investors most likely to buy a preferred stock near par are the ones who want predictable income, not leveraged crypto exposure with a coupon attached. STRC’s slide to $85 suggests that audience is shrinking, and the yield required to bring them back keeps getting higher.