How STRC Lost Its Par: Timeline of Strategy's Preferred-Stock Meltdown
Strategy's preferred stock STRC, designed to trade at $100 par, fell to $83 on June 18, driven by a series of events. The decline began with a convertible note buyback at an 8% discount, which reduced the cash reserve from 24 months to about 6 months of dividend coverage. Strive Asset Management announced daily dividends on its competing SATA security, increasing pressure. Bitcoin's price dropped from over $80,000 in May to below $60,000 by June 5, weakening investor confidence. Strategy sold 32 BTC for the first time since 2022, causing a stock drop. The company now holds 846,842 BTC at an average cost of $75,656, resulting in an unrealized loss of about $11.14 billion at current prices. The two most recent capital raises were viewed as dilutive, and common stock MSTR fell 80% from its all-time high. The key question is whether STRC can recover to par.
Key facts
- STRC fell to $83 per share, 17% below its $100 par value, on June 18.
- Cash reserve for dividends dropped from 24 months to 6 months after bond buyback.
- Strive's daily dividend on SATA increased pressure on STRC.
- Bitcoin dropped below $60,000, and Strategy sold 32 BTC for the first time since 2022.
- Strategy holds 846,842 BTC with an unrealized loss of $11.14 billion.