How STRC Slipped Below Par: Unpacking Strategy’s Preferred Stock Selloff

Here’s a clear, polished paraphrased version with a tighter narrative flow:

A mix of bond buybacks, shrinking cash reserves, and a weakening bitcoin market set off a chain reaction that pushed STRC away from its intended $100 par value and sparked broader market debate.

STRC, a dividend-paying preferred equity issued by bitcoin treasury firm Strategy (MSTR), is structured to trade at its $100 par value—but in practice, it hasn’t consistently held that level.

On Thursday, the stock dropped below $83—about 17% under par—marking its lowest level since launching in July 2025. The instrument was designed to offer high yield with relatively low volatility.

Maintaining a price near par is essential for Strategy, as it enables efficient capital raising through at-the-market (ATM) offerings used to fund its 11.5% annual dividend.

Recently, however, falling bitcoin prices alongside a series of corporate decisions have driven STRC well below its target level. Here’s how events unfolded:

May 14: STRC closed at $100 ahead of its monthly ex-dividend date while bitcoin traded above $80,000, giving the appearance of stability. However, bitcoin had already retreated significantly from its $126,000 peak in October, and STRC had only briefly held $100 leading into the dividend date rather than throughout the month.

On the same day, Strive Asset Management (ASST) announced daily dividend payments for its competing product, SATA, which offers a higher 13% yield. This added pressure on Strategy, which was seeking approval to shift STRC payouts from monthly to semi-monthly.

May 15: Strategy revealed it had repurchased $1.5 billion of its 2029 convertible notes at an 8% discount. The company still carried over $8 billion in such debt, unlike Strive, which had none. The buyback was partly funded by a cash reserve originally set aside to support dividends and debt payments, though this was not disclosed at the time. Meanwhile, bitcoin slipped to $78,000.

May 18: Strategy acquired 24,869 BTC as bitcoin continued its decline toward $76,000.

May 26: The company confirmed that the bond buyback had been financed using its cash reserve, reducing the fund to $871 million—roughly enough to cover six months of STRC dividends, down from a prior target of 24 months. STRC traded near $99, while bitcoin hovered around $77,000.

June 1: Strategy sold 32 BTC—its first sale since 2022—signaling a willingness to liquidate holdings to meet obligations if needed. Although the sale represented just 0.0038% of total holdings, the move rattled markets. MSTR shares fell 5.9%, and bitcoin dropped to about $71,000. STRC closed at $98.07.

June 5: Bitcoin fell below $60,000 for the first time since October 2024, closing near $61,000. STRC dropped sharply, hitting $90 before ending the day at $93.40.

June 8: Shareholders approved semi-monthly dividend payments for STRC. Strategy also purchased 1,550 BTC and reported its cash reserve had rebounded to $1 billion.

June 15: Another purchase of 1,587 BTC pushed the reserve up to $1.1 billion.

June 18: STRC briefly fell below $83 before closing at $88.59 ahead of a U.S. market holiday. Bitcoin declined again, slipping 2.4% to around $62,880. Strive CEO Matt Coles attributed the downturn to leverage-driven liquidations rather than deteriorating credit quality.

Strategy now holds 846,842 BTC at an average purchase price of $75,656. With bitcoin trading near $62,500, the company is sitting on an unrealized loss of roughly $11.1 billion.

At the same time, recent capital raises have been criticized as dilutive, drawing backlash from investors. MSTR shares now trade around $112, down approximately 80% from their November 2024 peak.

All of these developments have unfolded during a bitcoin bear market, amplifying investor concerns. As bitcoin prices declined, confidence weakened not only in the asset itself but also in the financial structures built around it.

The central question now is whether STRC can stabilize and eventually return to its $100 par value.

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