Key Takeaways
- STRC finished trading at $88.59 Thursday, plunging to an intraday bottom of $82.50 — representing its most prolonged period beneath the $100 par value since launching in July 2025
- Volume exploded to 10.7 million shares, dramatically exceeding the typical daily range of 3.4–3.5 million
- Investment firm Arca’s Jeff Dorman suggests Strategy might need to liquidate $3B–$4B worth of Bitcoin to bring STRC back to par value
- TD Cowen reaffirmed its Buy rating on MSTR with a $400 target price, even as MSTR shares dropped 4% to close at $112.53
- The company has suspended STRC’s ATM offering program during the period shares remain under par
Strategy’s preferred shares STRC ended Thursday’s session at $88.59, registering a second straight close beneath $90 and extending what has become its longest continuous period trading under the $100 par value threshold since its July 2025 market debut.
Throughout Thursday’s trading, STRC plummeted to an intraday floor of $82.50 before mounting a modest rebound. The security was structured to maintain par value through a variable dividend mechanism — presently established at 12.9% with monthly recalibrations.
Share turnover skyrocketed to roughly 10.7 million Thursday, vastly outpacing the standard daily volume range of approximately 3.4 to 3.5 million. This represents one of the most active trading sessions in the preferred stock’s history.
As STRC languishes below par, Strategy has suspended the security’s ATM issuance program. Under normal circumstances when STRC trades above $100, Strategy deploys proceeds from new share sales to acquire Bitcoin.
MSTR common shares also experienced a challenging session, declining 4% to settle at $112.53.
Potential Solutions for the STRC Situation
Jeff Dorman, Chief Investment Officer at Arca, outlined the available pathways in stark terms via X, characterizing the situation as the “MSTR pickle continues.”
Dorman’s primary projection — which he assigns a 70% likelihood — involves Strategy continuing modest monthly MSTR share sales at levels that don’t add per-share value. He contends this approach offers STRC shareholders “a glimmer of hope” while preserving the bulk of Bitcoin holdings, but cautions that MSTR shares “would get hammered.”
His alternative scenario, weighted at 25% probability, represents a more aggressive approach: Strategy liquidates $3 billion to $4 billion in Bitcoin holdings. Dorman indicates this would “buy a ton of time” and benefit STRC investors, although it would pressure Bitcoin prices near-term.
The final possibility — what Dorman labels the “nuclear” option with 5% probability — would see Strategy suspending payments on dividend-reliant preferred securities. That outcome could leave preferred shareholders recovering merely 30 to 40 cents per dollar and would probably exclude Strategy from capital markets access entirely. However, it would eliminate what Dorman calculates as roughly $1.7 billion in yearly cash obligations.
TD Cowen Maintains Optimistic Stance
Not all analysts are sounding alarms. TD Cowen reaffirmed its Buy recommendation on MSTR Thursday, preserving a $400 price objective while also voicing confidence in Strategy’s collection of preferred securities, including STRC.
The investment firm characterized Strategy as evolving beyond a straightforward leveraged Bitcoin vehicle toward what it describes as a “Bitcoin capital markets platform.”
TD Cowen analysts referenced three investor conferences with CFO Andrew Kang, observing that in the immediate term, the organization may emphasize reserve strengthening and preferred stock stabilization ahead of additional Bitcoin acquisitions during periods of adverse market conditions.
Peter Schiff adopted a more critical position than most observers, cautioning via social media about possible legal action against Michael Saylor’s Strategy concerning STRC’s persistent deterioration.
Dorman additionally challenged MSTR’s aggregate valuation, calculating the firm possesses approximately $35.2 billion in unencumbered Bitcoin assets against a $40.4 billion equity market capitalization — positioning MSTR at 1.15x mNAV. He argues the shares “should trade at a discount to NAV now” and face additional downside pressure absent a swift Bitcoin price recovery.
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