Strategy (MSTR) Stock: STRC Preferred Shares Crash to Record Low Amid Bitcoin Decline

TLDR

• STRC, Strategy’s preferred stock instrument, plunged to an all-time intraday low of $83 on June 18, trading approximately 17% beneath its $100 par value — marking the worst performance since launching in July 2025.
• The company’s $1.5 billion convertible bond repurchase depleted Strategy’s cash reserves, slashing projected dividend coverage from an intended 24-month buffer down to approximately 6 months.
• With bitcoin declining from highs above $80,000 in May to approximately $62,500, Strategy’s BTC portfolio now carries an unrealized deficit of roughly $11.14 billion.
• CEO Michael Saylor maintained the company’s financial strength, noting that combined BTC and USD reserves surpass total debt obligations by approximately $48 billion.
• While skeptics like Peter Schiff have questioned the legality of Strategy’s approach, advocates contend STRC’s framework remains viable provided Bitcoin experiences long-term appreciation.

On June 18, Strategy’s STRC preferred shares collapsed to an unprecedented intraday bottom of $83, ultimately settling at $88.59 — approximately 17% under the $100 par value benchmark. Since its July 2025 introduction, the instrument was engineered to maintain trading levels at or close to par while delivering an 11.5% annualized return.

Strategy Inc, MSTR

This sharp decline wasn’t an abrupt event. Rather, it emerged from a sequence of corporate actions and bitcoin’s persistent price deterioration spanning several weeks.

Heading into its monthly ex-dividend date on May 14, STRC maintained its $100 level while bitcoin commanded prices exceeding $80,000. Superficially, the situation appeared stable. However, BTC had already retreated significantly from its October 2024 peak of $126,000.

That identical day, competitor Strive Asset Management unveiled SATA, its own preferred instrument featuring daily distributions at a 13% yield — immediately creating competitive pressure for Strategy.

Convertible Note Repurchase Drains Cash Cushion

The following day, May 15, Strategy disclosed plans to repurchase $1.5 billion worth of its 2029 convertible bonds at an 8% discount. The company financed a portion of this transaction by tapping into cash reserves initially designated for dividend distributions and debt service obligations.

This crucial information wasn’t immediately transparent. When details surfaced on May 26, the reserve balance had contracted to $871 million — dramatically reducing STRC dividend coverage from the advertised 24-month projection to merely 6 months.

STRC slipped to $99.33 that session. Bitcoin was changing hands around $77,000.

Despite this, Strategy persisted with bitcoin accumulation. On May 18, the firm acquired 24,869 BTC while prices descended toward $76,000.

June 1 delivered another unexpected development. Strategy disposed of 32 BTC — representing its first bitcoin divestment since 2022. Though minuscule at just 0.0038% of total holdings, the transaction alarmed market participants. MSTR shares declined 5.9% that day. Bitcoin tumbled to lows near $70,500. STRC settled at $98.07.

Accelerating Bitcoin Weakness Compounds Challenges

By June 5, bitcoin had penetrated below $60,000 for the first time since October 2024. STRC touched lows of $90 before recovering to close at $93.40.

Strategy shareholders authorized a transition to semi-monthly STRC dividend distributions on June 8, an adjustment intended to minimize volatility surrounding ex-dividend periods. The company simultaneously disclosed its dollar reserve had rebounded to $1 billion following the purchase of 1,550 BTC.

On June 15, Strategy added another 1,587 BTC to its portfolio. Reserve balances reached $1.1 billion.

Then June 18 arrived. STRC plummeted to $83 during trading hours before finishing at $88.59 as bitcoin declined 2.4% to $62,880. Strive CEO Matt Coles, whose SATA instrument also suffered losses, attributed the downturn to forced liquidations from leveraged positions rather than fundamental credit deterioration.

Strategy currently maintains 846,842 BTC, accumulated at an average acquisition cost of $75,656 per unit. With bitcoin hovering around $62,500, the corporation faces an unrealized portfolio loss approaching $11.14 billion.

MSTR common equity trades near $112, representing roughly an 80% decline from its November 2024 record high.

Michael Saylor countered critics this week, declaring via X that combined BTC and USD reserves now surpass the company’s total debt burden by approximately $48 billion. He drew comparisons to 2022, when debt temporarily exceeded reserves by $300 million while BTC traded near $20,000.

Peter Schiff has advocated for shareholder litigation and suggested Saylor potentially breached SEC promotional regulations while marketing STRC. Conversely, Bitcoin proponent Samson Mow characterized STRC as a “brilliant instrument,” maintaining there are no inherent structural deficiencies unless one assumes bitcoin won’t appreciate over extended timeframes.

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