Strategy's flagship preferred stock, Stretch (STRC), fell to a new record low of $71.25 on Friday before recovering to $75.30, marking a nearly 25% decline from its $100 par value. The decline comes as Bitcoin remains below $60,000, with the company's Bitcoin holdings worth $51 billion at current prices, sitting $13.1 billion underwater. Analysts are increasingly focused on Strategy's capital structure, particularly the recurring costs associated with STRC. Michael Saylor acknowledged the volatility but emphasized disciplined capital allocation and long-term value creation. The preferred stock's weakness has led to calls for Saylor to raise more cash to cover costs. STRC currently offers an 11.5% annual dividend, but investors are demanding higher yields, with some suggesting the dividend needs to rise to 15-20% to make the product sustainable. Strategy has issued over $10 billion in STRC in less than a year, leading to ballooning costs as noted by CryptoQuant. The company's common stock fell to $82.33 before recovering to $85.80, up 0.5% on the day.

Key facts

• STRC fell to a record low of $71.25, down nearly 25% from par value.
• Strategy's Bitcoin holdings are $13.1 billion underwater at current prices.
• Analysts call for higher STRC dividend, possibly 15-20%, to attract investors.
• Strategy issued over $10 billion in STRC in less than a year, ballooning costs.
• Michael Saylor emphasizes disciplined capital allocation amid volatility.

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