How STRC lost its par: The timeline behind Strategy's preferred-stock meltdown

4 min readMake preferred on ShareShare this articleCopy linkX iconX (Twitter)LinkedInFacebookEmailMake preferred on Strategy Executive Chairman Michael Saylor. (Nikhilesh De)SummaryShowStrategy's preferred stock STRC, designed to hold a price of $100, on Thursday dropped to a low of $83.A number of events led up to the slide, including a buyback of convertible notes at an 8% discount and rival Strive saying it would start paying a daily dividend on its SATA equivalent.The decline was also driven by a combination of falling bitcoin prices, reduced liquidity buffers and weakening investor confidence.STRC, the dividend-paying preferred equity issued by bitcoin treasury company Strategy (MSTR), is designed to hold a price of $100, its par value. It doesn't always work that way. On Thursday, the stock price dropped below $83, some 17% below the target and the lowest since it debuted in July 2025. The security is meant to be high-yield, low-volatility. Keeping the stock near par is critical because it allows Strategy to raise capital efficiently through at-the-market (ATM) offerings to fund the annualized 11.5% payout. In recent weeks, however, a sharp decline in the price of bitcoin BTC$63,574.31, combined with a series of management decisions, have pushed STRC significantly below its intended trading level. Here's how it happened: May 14: STRC closed at $100 heading into its monthly ex-dividend date, while bitcoin traded above $80,000. On the surface, then, everything appeared normal. (Investors buying a stock on the ex-dividend date do not receive the payout, so the price tends to drop to reflect the lost value.) Below the surface, though, the situation was messier. Bitcoin was already trading significantly below its October record of $126,000, and STRC had been able to maintain $100 only in the run-up to the ex-dividend date, not consistently throughout the month. In addition, Strive Asset Management (ASST) chose that day to say it would pay dividends on its competing security, SATA, on a daily basis. SATA offers a higher yield, 13%, increasing pressure on Strategy as it sought shareholder approval to move STRC from monthly to semi-monthly dividend payments. STRC's proposed change was designed to reduce volatility around ex-dividend dates and help the security trade closer to par for longer periods. May 15: Strategy announced the repurchase of $1.5 billion of its 2029 convertible notes at an 8% discount. While Strategy carried more than $8 billion in convertible debt at the time, Strive had none outstanding. The transaction was part-funded using a dollar cash reserve established at the end of 2025 to support payments on dividends and debt obligations. The fund's use in the transaction was not revealed at the time. May 18: Strategy bought 24,869 BTC as the largest cryptocurrency slid toward $76,000. May 26: The company confirmed it had used its cash reserve to finance the bond repurchase. The transaction had reduced the fund to $871 million. The buyback reduced that reserve to roughly six months of STRC dividend coverage. The company had previously said the plan was to maintain about 24 months of dividend coverage. STRC traded at $99.33, bitcoin hovered around $77,000. June 1: Strategy sold 32 BTC, its first bitcoin sale since 2022. The move appeared intended to demonstrate that the company was willing and able to sell the token if necessary to fund dividend obligations. The sale accounted for just 0.0038% of the company's holdings. Nevertheless, the company's common stock (MSTR) dropped 5.9% and bitcoin fell to as low as $70,500 before closing at $71,286. STRC closed at $98.07. June 5: Bitcoin fell below $60,000 for the first time since October 2024, closing around $61,000, according to CoinDesk data. STRC dropped to as low as $90 to end the day at $93.40. June 8: Strategy shareholders approve the plan to pay STRC dividends twice a month. Strategy bought 1,550 BTC and said the balance of its dollar reserve had risen to $1 billion. June 15: Strategy bought another 1,587 BTC and said the balance of its dollar reserve was now $1.1 billion. June 18: STRC fell below $83 intraday, closing at $88.59 as the U.S. headed into a holiday weekend with no equity trading on Friday. Bitcoin erased a short-lived rebound, falling 2.4% to $62,880. Strive CEO Matt Coles, whose SATA also dropped, blamed the slide on a leverage-driven liquidation rather than a sign of weakening credit fundamentals. The company now holds 846,842 BTC, acquired at an average cost of $75,656 per bitcoin. At a BTC price of around $62,500, Strategy is sitting on an unrealized loss of approximately $11.14 billion At the same time, its two most recent capital raises were viewed as dilutive, generating significant pushback from the community. The common stock now trades around $112, down roughly 80% from its November 2024 all-time high. The challenge for Strategy is that all of these changes occurred during a bitcoin bear market. As b

How STRC lost its par: The timeline behind Strategy's preferred-stock meltdown

Key takeaways

More in business