Strategy’s perpetual preferred stock (ticker: STRC) plunged to an all-time low of $82.53 on Thursday, marking a sharp decline that has rattled investors and cast renewed doubt on the company’s aggressive Bitcoin acquisition model. The stock, which had already slipped to $85.60 earlier in the day, partially recovered to $87.45 but remained well below its $100 par value.
The sell-off extends a period of sustained weakness for the instrument, which was originally issued to fund the firm’s massive Bitcoin purchases. Analysts at CoinShares and Benchmark-StoneX pointed to structural and sentiment-driven factors behind the drop, rather than a fundamental crisis. James Butterfill, head of research at CoinShares, noted that “STRC’s continued weakness appears to be driven less by Bitcoin itself and more by uncertainty around how Strategy intends to fund and manage its growing fixed obligations.” He added that a Bitcoin rebound alone would not automatically increase the cash available to cover dividends.
The product’s cyclical performance typically sees dips after ex-dividend dates, but the current dislocation has been exacerbated by a recent decision to sell 32 Bitcoin for $2.5 million to reassure preferred stockholders. That move, while telegraphed in advance, raised questions about whether the world’s largest corporate Bitcoin holder might need to pare its holdings further. In response, Strategy emphasized that its $55 billion Bitcoin reserve provides 32 years of dividend coverage against $1.7 billion in annual obligations.
Benchmark-StoneX’s Mark Palmer believes the weakness is mechanical rather than a sign of distress, noting that the structure is designed to drift when the dividend rate sits below market clearing levels. He expects the company to raise the dividend in July, a step that could pull the price back toward par. Despite the reassurances, the decline in STRC dragged down Strategy’s common stock, which fell as low as $109.36—its lowest in four months—and intensified scrutiny of the firm’s leveraged Bitcoin bet.
