Key Highlights
- STRC finished Thursday at $88.59 after touching an intraday bottom of $82.50 — marking the most extended period below its $100 par value since launching in July 2025
- Daily trading volume exploded to 10.7 million shares, significantly exceeding the typical 3.4–3.5 million average
- Jeff Dorman from Arca suggests Strategy might be forced to liquidate $3B–$4B worth of Bitcoin to bring STRC back to par
- TD Cowen reaffirmed its Buy rating on MSTR with a $400 target, even as MSTR shares dropped 4% to close at $112.53
- The company has suspended STRC’s ATM offering while the preferred stock remains under par value
Strategy’s preferred shares, trading under the ticker STRC, ended Thursday’s session at $88.59, recording back-to-back closes beneath $90 and extending what has become the longest sustained period trading under its $100 par value since the security’s July 2025 launch.
Throughout Thursday’s trading, STRC touched a session low of $82.50 before staging a modest rebound. The preferred security was structured to maintain par value through a variable dividend mechanism — presently yielding 12.9% with monthly recalibrations.
Trading activity on Thursday exploded to roughly 10.7 million shares, dramatically outpacing the standard daily volume of approximately 3.4 to 3.5 million. This represents one of the most active trading sessions for the preferred stock since its inception.
Because STRC has fallen below its par value, Strategy has temporarily suspended the security’s ATM offering. Under normal circumstances when STRC trades above $100, the company issues additional preferred shares to fund Bitcoin acquisitions.
Strategy’s common stock experienced its own turbulence, dropping 4% to finish at $112.53.
Potential Paths Forward for STRC Recovery
Jeff Dorman, Arca’s Chief Investment Officer, didn’t mince words when discussing the situation on X, describing the “MSTR pickle continues.”
Dorman’s primary forecast — which he assigns a 70% likelihood — envisions Strategy gradually offloading modest quantities of MSTR common stock monthly at valuations that don’t enhance Bitcoin per share. He suggests this approach offers STRC shareholders “a glimmer of hope” while largely preserving the Bitcoin treasury, though he cautions MSTR stock “would get hammered.”
His alternative scenario, assigned a 25% probability, involves more aggressive action: liquidating $3 billion to $4 billion from the Bitcoin holdings. Dorman indicates this would “buy a ton of time” and benefit STRC holders, despite creating short-term headwinds for Bitcoin prices.
The final possibility — what Dorman labels the “nuclear” option at just 5% probability — would see Strategy discontinue payments on its dividend-dependent preferred securities. That outcome could leave preferred investors recovering only 30 to 40 cents per dollar and would likely close Strategy’s access to capital markets permanently. However, it would eliminate what Dorman calculates as roughly $1.7 billion in annual cash obligations.
TD Cowen Maintains Optimistic Outlook
Despite the turmoil, some analysts remain confident. TD Cowen reiterated its Buy stance on MSTR Thursday, preserving its $400 price objective while also endorsing Strategy’s complete preferred stock lineup, including STRC.
The investment firm characterized Strategy’s evolution from a straightforward leveraged Bitcoin vehicle toward what they describe as a “Bitcoin capital markets platform.”
TD Cowen’s analysts referenced three investor discussions with CFO Andrew Kang, highlighting that in the near term, the company may emphasize reserve restoration and preferred stock stabilization over additional Bitcoin acquisitions when market dynamics prove challenging.
Peter Schiff escalated the criticism beyond typical analyst concerns, cautioning on social platforms about potential litigation against Michael Saylor’s Strategy regarding STRC’s persistent decline.
Dorman also scrutinized MSTR’s broader valuation metrics, calculating the company possesses approximately $35.2 billion in unencumbered Bitcoin collateral compared to a $40.4 billion equity market capitalization — translating to 1.15x modified NAV. He argues the stock “should trade at a discount to NAV now” and faces additional downside unless Bitcoin experiences a swift recovery rally.
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