STRC Hits All Time Low Below $74 as Strategy Faces Dividend and Bitcoin Pressure

TLDR

Strategy’s STRC preferred stock fell to a record low on Thursday as Bitcoin’s decline below $60,000 increased pressure on the company’s capital structure and raised new concerns about investor confidence in its funding model.

STRC dropped to an intraday low of $73.65 before recovering near $79, leaving the preferred stock more than 20% below its $100 stated value. The move lifted its effective yield above 15% at the session low, even though Strategy has not raised the official annual dividend rate from 11.5%.

The decline came as Bitcoin briefly fell to $58,189, its lowest level of the year, before recovering toward $59,600. Strategy common stock also fell below $90, touching $86.72 and reaching its lowest level since early 2024 amid a weakening in the broader Bitcoin treasury trade.

STRC Yield Rises as Price Falls Below Par

STRC pays an annual dividend of 11.5% based on its $100 stated amount, which equals $11.50 per share each year. When the market price falls below par, the effective yield rises because investors buying at a lower price receive the same stated cash payment.

Source: X

At a market price near $79, STRC’s effective yield is roughly 14.6%. At Thursday’s low of $73.65, the effective yield briefly rose above 15.6%, showing how sharply the preferred stock has repriced during the latest Bitcoin selloff.

Strategy reviews the STRC dividend rate each month using the security’s monthly volume-weighted average price. Under the company’s framework, a monthly average below $95 leads management to recommend a dividend increase of at least 50 basis points, subject to board approval.

If June’s average remains below $95, STRC’s dividend rate could rise to at least 12% for the next period. With about $10.49 billion of STRC outstanding, a 50 basis point increase would add roughly $52 million to Strategy’s annual dividend cost.

Cash Reserve Provides Dividend Runway

Strategy currently faces higher funding pressure, but analysts do not describe an immediate need to sell Bitcoin. The company held a $1.4 billion reserve as of June 21 and recently raised $335.5 million through common stock sales.

That reserve gives Strategy close to 10 months of coverage for STRC dividend obligations, based on current annual costs of $1.21 billion. The company can also slow Bitcoin purchases, issue additional equity, raise the preferred dividend rate or repurchase STRC shares before considering Bitcoin sales.

STRC is perpetual and does not require Strategy to redeem shares at $100. That structure limits near-term cash pressure, although a preferred stock trading far below par makes future issuance less efficient.

Benchmark analyst Mark Palmer previously noted that below-par STRC pricing weakens Strategy’s ability to raise attractive capital for Bitcoin purchases. The issue is therefore tied more closely to capital market access and investor appetite than immediate dividend solvency.

MSTR Falls as Legal and Market Pressure Builds

Strategy’s common stock has also come under pressure. MSTR fell more than 9% at times on Thursday and has declined nearly 30% over five sessions, outpacing Bitcoin’s drop over the same period.

Legal pressure added to the market weakness after Rosen Law Firm announced an investigation into possible securities fraud claims involving Strategy. The investigation covers MSTR and the company’s preferred securities, including STRF, STRC, STRK and STRD.

Strategy holds 847,363 Bitcoin, the largest corporate Bitcoin position in the market. Recent price declines have pushed several acquisition periods underwater, and market estimates place unrealized losses on the Bitcoin portfolio near $10.6 billion.

CryptoQuant recently urged Strategy to pause Bitcoin purchases and rebuild cash reserves toward about $2.8 billion before resuming larger accumulation. The firm said dividend coverage has fallen from more than seven years to roughly 14 months as obligations increased and reserves declined.

Strategy’s most recent weekly purchase was smaller than earlier buying periods. The company bought 520 Bitcoin for about $35 million and directed most of a $335.5 million common stock raise into cash reserves, indicating a more cautious approach as STRC, MSTR and Bitcoin remain under pressure.

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