STRC’s Breakdown: How Strategy’s Preferred Shares Lost Their Par Value

A combination of debt buybacks, tightening liquidity, and a prolonged bitcoin downturn set off a chain reaction that knocked STRC well below its $100 par value—fueling broader investor concern.

STRC, the dividend-paying preferred equity issued by bitcoin treasury firm Strategy (MSTR), is structured to trade at par. In practice, however, maintaining that level has proven challenging.

On Thursday, the stock fell below $83—roughly 17% under par and its lowest point since its July 2025 debut. The instrument was designed to deliver high yield with relatively low volatility.

Trading near $100 is critical for Strategy, as it allows the company to efficiently raise capital through at-the-market (ATM) offerings used to support its 11.5% annual dividend.

In recent weeks, though, falling bitcoin prices and a string of company decisions have pushed STRC meaningfully below its target. Here’s how the situation unfolded:

May 14: STRC closed at $100 ahead of its ex-dividend date while bitcoin traded above $80,000, masking underlying weakness. Bitcoin had already fallen sharply from its $126,000 peak, and STRC had only briefly held par. Meanwhile, a competing product from Strive Asset Management offering a higher 13% yield and daily payouts added pressure.

May 15: Strategy announced a $1.5 billion repurchase of its 2029 convertible notes at an 8% discount. The buyback was partly funded using a cash reserve originally intended for dividends and debt servicing—though this wasn’t disclosed at the time. Bitcoin slipped to $78,000.

May 18: The company acquired 24,869 BTC as bitcoin continued to drift lower toward $76,000.

May 26: Strategy confirmed it had tapped its cash reserve for the bond repurchase, reducing the fund to $871 million—equivalent to roughly six months of dividend coverage, down from a prior 24-month target. STRC hovered just below par as bitcoin traded near $77,000.

June 1: Strategy sold 32 BTC—its first sale since 2022—signaling a willingness to liquidate holdings if needed. Despite the small size, the move unsettled markets: MSTR shares fell nearly 6%, and bitcoin dropped to around $71,000. STRC closed at $98.07.

June 5: Bitcoin fell below $60,000 for the first time since October 2024, ending near $61,000. STRC declined sharply, touching $90 before finishing at $93.40.

June 8: Shareholders approved a shift to semi-monthly dividends. Strategy also bought 1,550 BTC and said its cash reserve had recovered to $1 billion.

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

June 18: STRC briefly dropped below $83 before closing at $88.59 ahead of a holiday-shortened trading week. Bitcoin slid again to around $62,880, with some attributing the move to leverage-driven liquidations rather than weakening fundamentals.

Strategy now holds 846,842 BTC at an average cost of $75,656, leaving it with an unrealized loss of roughly $11 billion at current prices.

At the same time, recent capital raises have been criticized as dilutive, with MSTR shares down about 80% from their November 2024 peak.

All of this has unfolded against the backdrop of a bitcoin bear market, undermining confidence not only in the asset itself but also in the financial structures built around it.

The key question now is whether STRC can regain stability and climb back to its $100 par value.