Key Takeaways
- STRC preferred shares from Strategy hit an all-time intraday low of $83, representing approximately 17% below the $100 par value since launching in July 2025.
- The company’s $1.5 billion convertible bond repurchase reduced cash reserves earmarked for dividends from 24 months of coverage down to approximately 6 months.
- Bitcoin’s descent from over $80,000 in May to approximately $62,500 has left Strategy with roughly $11.14 billion in unrealized losses across its BTC portfolio.
- CEO Michael Saylor maintains the company’s combined BTC and cash reserves surpass total debt obligations by approximately $48 billion.
- Controversy has emerged with skeptics like Peter Schiff raising concerns about potential violations, while Bitcoin proponents defend STRC’s fundamental design.
On June 18, Strategy’s STRC preferred shares plunged to an unprecedented intraday bottom of $83, ultimately settling at $88.59 — approximately 17% beneath the intended $100 par value benchmark. Launched in July 2025, this security was structured to maintain par value pricing while delivering an 11.5% annual dividend yield.
This sharp decline wasn’t an isolated event but rather the culmination of strategic decisions and deteriorating cryptocurrency market conditions spanning several weeks.
As recently as May 14, STRC maintained its $100 valuation entering the monthly ex-dividend period, with bitcoin commanding prices above $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 its SATA preferred instrument, featuring daily dividend distributions at a 13% yield — immediately escalating competitive pressure on Strategy’s offering.
Convertible Note Repurchase Depletes Cash Cushion
The following day, May 15, Strategy revealed plans to repurchase $1.5 billion worth of its 2029 convertible bonds at an 8% discount. The transaction was partially financed through cash reserves originally allocated for dividend obligations and debt service.
This critical information wasn’t immediately transparent. When details emerged on May 26, the reserve balance had contracted to $871 million — dramatically reducing STRC dividend coverage from the previously communicated 24-month buffer to merely 6 months.
STRC declined to $99.33 on that date. Bitcoin was hovering near $77,000.
Despite these developments, Strategy maintained its bitcoin accumulation strategy. On May 18, the company acquired 24,869 BTC while prices descended toward $76,000.
June 1 delivered an unexpected development. Strategy liquidated 32 BTC — marking its first bitcoin disposition since 2022. Though representing merely 0.0038% of total holdings, the symbolic nature rattled investors. MSTR shares dropped 5.9% that session. Bitcoin fell to approximately $70,500. STRC concluded trading at $98.07.
Cryptocurrency Weakness Compounds Pressure
By June 5, bitcoin had breached the $60,000 threshold for the first time since October 2024. STRC temporarily touched $90 before recovering to close at $93.40.
Strategy shareholders authorized a transition to semi-monthly STRC dividend distributions on June 8, 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, an additional 1,587 BTC was acquired. Reserves expanded to $1.1 billion.
June 18 proved particularly challenging. STRC bottomed at $83 intraday before recovering to $88.59 as bitcoin declined 2.4% to $62,880. Strive CEO Matt Coles, whose SATA security also experienced depreciation, attributed the selloff to forced liquidations from leveraged positions rather than fundamental credit deterioration.
Strategy’s current holdings comprise 846,842 BTC, accumulated at an average acquisition cost of $75,656 per coin. At current bitcoin prices near $62,500, the company faces unrealized losses approaching $11.14 billion.
MSTR common shares trade around $112, representing roughly an 80% decline from November 2024 peak levels.
Michael Saylor responded to detractors this week, asserting via X that combined BTC and USD reserves now exceed company debt obligations by approximately $48 billion. He drew comparisons to 2022, when debt temporarily surpassed reserves by $300 million with BTC trading near $20,000.
Peter Schiff has advocated for investor legal action and suggested Saylor potentially violated SEC promotional regulations regarding STRC marketing. Bitcoin advocate Samson Mow characterized STRC as a “brilliant instrument,” contending no structural deficiencies exist unless one assumes bitcoin lacks long-term appreciation potential.
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