Key Takeaways
- Strategy’s STRC preferred shares plummeted to an intraday bottom of $83, marking approximately 17% beneath the $100 par value threshold — representing its weakest performance since launching in July 2025.
- The company’s $1.5 billion convertible bond repurchase depleted cash reserves, shrinking dividend protection from an intended 24-month buffer to approximately 6 months.
- BTC prices have tumbled from heights exceeding $80,000 in May to approximately $62,500, resulting in Strategy carrying unrealized losses near $11.14 billion across its bitcoin portfolio.
- CEO Michael Saylor maintains the firm’s financial position remains strong, noting that combined BTC and cash reserves surpass total debt obligations by roughly $48 billion.
- Detractors like Peter Schiff have voiced fraud concerns, while proponents contend STRC’s framework remains viable assuming Bitcoin’s eventual long-term appreciation.
Strategy’s STRC preferred equity instrument experienced a historic intraday decline to $83 on June 18, ultimately settling at $88.59 — representing approximately 17% below the targeted $100 par benchmark. This security made its market entrance in July 2025, engineered to maintain par-level trading while delivering an 11.5% annualized return.
This dramatic decline wasn’t an abrupt event. Rather, it unfolded through a sequence of corporate actions combined with steadily weakening bitcoin valuations throughout recent weeks.
On May 14, STRC maintained its $100 position approaching the monthly ex-dividend milestone, while bitcoin commanded prices north of $80,000. Superficially, the situation appeared stable. However, bitcoin had already retreated significantly from its October 2024 peak of $126,000.
That identical day, competitor Strive Asset Management unveiled its own preferred instrument, SATA, promising daily distributions at a 13% yield — immediately creating competitive headwinds for Strategy’s offering.
Convertible Note Repurchase Drains Cash Cushion
On May 15, Strategy revealed plans to repurchase $1.5 billion worth of 2029-maturity convertible bonds at an 8% markdown. The transaction was partially financed using cash reserves previously earmarked for covering dividend obligations and debt servicing.
This critical information wasn’t immediately transparent. When details emerged on May 26, available reserves had contracted to $871 million — slashing STRC dividend coverage from the advertised 24-month timeframe down to merely 6 months.
STRC declined to $99.33 on that date. Bitcoin was exchanging hands around $77,000.
Despite these developments, Strategy persisted in accumulating bitcoin. On May 18, the firm acquired 24,869 BTC while prices descended toward $76,000.
June 1 delivered another unexpected development. Strategy divested 32 BTC — marking its initial bitcoin liquidation since 2022. While the transaction was minuscule, representing just 0.0038% of total holdings, the symbolic impact rattled markets. MSTR plunged 5.9% that session. Bitcoin retreated to lows near $70,500. STRC concluded trading at $98.07.
Accelerating Bitcoin Weakness Intensifies Selling Pressure
By June 5, bitcoin had penetrated below the $60,000 threshold for the first time since October 2024. STRC touched intraday lows of $90 before recovering to close at $93.40.
Shareholders granted approval on June 8 for transitioning STRC to a semi-monthly dividend schedule, an adjustment intended to minimize price volatility surrounding ex-dividend periods. The company simultaneously disclosed its dollar reserves had rebounded to $1 billion following the purchase of 1,550 BTC.
On June 15, Strategy added another 1,587 BTC to its treasury. Reserves registered at $1.1 billion.
Then came June 18. STRC touched $83 during trading hours before recovering to close at $88.59 as bitcoin shed 2.4% to reach $62,880. Strive CEO Matt Coles, whose SATA instrument also experienced declines, attributed the selling pressure to leverage-induced liquidations rather than fundamental credit deterioration.
Strategy currently maintains custody of 846,842 BTC, accumulated at an average acquisition cost of $75,656 per unit. With bitcoin hovering around $62,500, the corporation faces unrealized losses approximating $11.14 billion.
MSTR common shares trade near $112, reflecting roughly 80% depreciation from the November 2024 all-time peak.
Michael Saylor countered criticism this week, declaring via X that combined BTC holdings and USD reserves now exceed corporate debt obligations by approximately $48 billion. He drew comparisons to 2022 conditions, when debt temporarily surpassed reserves by $300 million while BTC traded around $20,000.
Peter Schiff has advocated for shareholder litigation and suggested Saylor potentially breached SEC promotional guidelines in marketing STRC. Bitcoin proponent Samson Mow characterized STRC as a “brilliant instrument,” maintaining no structural deficiencies exist unless one assumes bitcoin will fail to appreciate over extended timeframes.
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