Strategy's perpetual preferred security, Stretch (STRC), fell as low as $97.11 on Thursday, slipping below its $100 par value as bitcoin dipped to the $73,000 mark. The decline follows a familiar pattern: STRC tends to face selling pressure during bitcoin drawdowns and in the days immediately after its ex-dividend date. Together, these factors have historically created short-term pressure on STRC’s market price.
Strategy repurchased $1.5 billion of its 0% convertible senior notes due 2029, reducing its overall debt burden. However, the buyback was funded using U.S. dollar reserves, shrinking the company’s cash balance from roughly $2.25 billion to $871 million. With annual preferred dividend obligations of about $1.7 billion, the remaining cash now covers only about six months of dividends — down from the 24-month cushion initially intended.
Executive Chairman Michael Saylor recently told CoinDesk that the company could meet dividend obligations by selling bitcoin, issuing additional MSTR equity when the stock trades above a 1.22x multiple to net asset value, or raising capital through STRC issuance. He stressed that management evaluates these decisions based on bitcoin per share accretion.
Meanwhile, rival bitcoin treasury company Strive Asset Management (ASST) has captured investor attention with its perpetual preferred security, SATA. Strive announced daily dividend payments for SATA, which has remained tightly anchored around its $100 par value while offering a yield of approximately 13% — even as bitcoin declined. The daily dividend feature, though not yet implemented, is seen as a stabilizing mechanism. Strive also eliminated all debt inherited through its acquisition of Semler Scientific, mirroring the direction Strategy appears to be pursuing.
Over the past three months, Strive shares have gained roughly 110%, compared with a 12% rise in MSTR and an 8% increase in bitcoin, suggesting investors are rewarding the cleaner balance sheet and higher-yielding preferred structure.
The financial maneuvers have drawn fresh criticism from gold advocate Peter Schiff, who likened Strategy’s bitcoin treasury model to falling dominoes. Speaking in a video on May 28, Schiff argued that Strategy’s use of cheap borrowed money to buy bitcoin is one of three interconnected pressures — alongside the $39 trillion U.S. national debt and an AI investment bubble — that could unravel together if interest rates rise sharply. He read the early buyback of zero-interest convertible notes as a sign the company needed to protect liquidity while staying heavily exposed to bitcoin.
Yet other financial analysts view the same move as smart capital management. They note that the notes were repurchased at a discount, removing the threat of significant shareholder dilution. Switching from convertible debt to preferred equity also eases pressure if bitcoin enters a prolonged slump and could facilitate additional debt for more bitcoin purchases. Strategy itself maintains it can cover debt and dividends even if bitcoin drops as low as $8,000, and stays profitable as long as bitcoin grows by at least 1.25% annually. Schiff, meanwhile, recommends moving away from tech stocks and crypto toward gold and physical assets.
