Strategy's STRC Preferred Stock Falls Below Par, Halting Bitcoin Funding Program
Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) closed at a record low of $89 on Wednesday, about 11% below its $100 par value. This triggers a pause in the company's at-the-market share issuance program, which is a key funding channel for bitcoin purchases. The decline follows Strategy's first-ever sale of bitcoin in late May to cover STRC dividends, selling 32 coins for $2.5 million. While Strategy has built a $1.1 billion reserve to cover preferred dividends and debt, the STRC slump constrains new bitcoin accumulation. The company still holds 846,842 bitcoin, about 4% of total supply. STRC's variable dividend (currently 12.9%) adjusts monthly to target $100, but persistent weakness suggests market concerns about dividend sustainability and bitcoin volatility. Common stock MSTR also fell 5% to $116.52.
Key facts
- STRC closed at $89, 11% below par value, halting at-the-market issuance for bitcoin funding.
- This is the first time Strategy sold bitcoin (32 coins, $2.5M) to fund preferred dividends.
- Strategy holds 846,842 bitcoin, 4% of total supply, largest corporate holder.
- Company built $1.1B reserve for dividends/debt but STRC slump limits new purchases.