STRC, a dividend-paying preferred share under Strategy, recently fell below $83, approximately 17% below its $100 par value, hitting its lowest level since its listing in July 2025. For a security originally marketed for its high yield and low volatility, this sustained deviation from par value suggests increasing pressure on the company’s ability to raise capital through secondary offerings to fund dividend payments.
Why the face value mechanism has failed
STRC is designed to trade as close to $100 as possible. Only when the price is near par can Strategy efficiently issue additional funds via ATM to cover its 11.5% annual dividend payout.
However, over the past several weeks, Bitcoin’s price has continued to decline, and combined with the company’s adjustments to its debt and cash reserves, this has eroded market confidence in this structure. CoinDesk’s timeline shows that STRC’s decline was not triggered by a single event, but rather resulted from multiple overlapping pressures.
Began to face pressure in mid-May
On May 14, STRC closed near $100 ahead of its monthly ex-dividend date, while Bitcoin remained above $80,000. On the surface, the price appeared stable, but the market had begun to worry that it could only briefly maintain its par value around the ex-dividend date and would struggle to remain stable throughout the month.
On the same day, Strive Asset Management announced that it would offer daily dividends on its competing product, SATA. With a yield of approximately 13%, SATA outperforms STRC, increasing pressure on Strategy to accelerate its plan to shift STRC from monthly to biweekly dividends.
On May 15, Strategy announced a repurchase of $1.5 billion in convertible notes due 2029 at an 8% discount. The company later confirmed that this transaction partially drew from its U.S. dollar cash reserves established by the end of 2025. By May 26, these reserves had declined to $871 million—sufficient to cover only about six months of STRC dividends, whereas the company had previously aimed to maintain coverage for approximately 24 months.
Bitcoin decline amplifies the impact
During the capital structure adjustment, Bitcoin weakened in tandem. On May 18, Strategy continued to purchase 24,869 BTC when Bitcoin had declined to $76,000. On June 1, the company sold 32 BTC, marking its first Bitcoin sale since 2022.
This sale represented only 0.0038% of its total holdings, but the market viewed it as a signal that the company is willing to sell Bitcoin if necessary to fulfill its dividend obligations. On that day, MSTR common shares fell 5.9%, Bitcoin dropped as low as $70,500, and STRC closed at $98.07.
On June 5, Bitcoin fell below $60,000 for the first time since October 2024, with STRC dropping to a low of $90 that day and closing at $93.40. By June 18, STRC fell further intraday below $83, closing at $88.59; during the same period, Bitcoin retraced its brief rebound and declined to approximately $62,880.
Unrealized losses on positions and financing disputes intensify concerns
At that time, Strategy held 846,842 BTC with an average purchase cost of approximately $75,656 per BTC. Based on Bitcoin’s price of around $62,500, the company recorded an unrealized loss of approximately $11.14 billion.
Meanwhile, the market has seen a notable rebound in response to its recent fundraising rounds, with concerns that these actions have led to dilution. MSTR’s common shares are currently trading at approximately $112, down about 80% from their November 2024 high.
For Strategy, a more challenging issue is that these financings and reserve adjustments occurred during a downturn in Bitcoin. As the underlying asset weakened, investors not only reassessed Bitcoin itself but also began reevaluating the dividend securities and capital structure built around it. Whether STRC can return to a trading range close to $100 has become a focal point for the market.