Strategy’s perpetual preferred stock STRC has dropped below its $100 issue price, at one point sliding close to $85 and recently trading at $88.59. The move marks its lowest level since listing in July 2025 and has triggered a broader debate over whether the product’s price-support design is already under strain less than a year after launch.
An adjustable-dividend structure is now being tested in the market
STRC is not common equity. It is a preferred stock with an adjustable dividend, built around the idea that Strategy can raise the payout if the market price falls too far below $100, making the security more attractive and pulling the price back toward par.
The mechanics matter. Dividends are calculated on the $100 par value rather than the lower market price, which means an investor buying around $89 would still receive the same cash distribution as someone who bought at par. That discount can look appealing to buyers, but it also increases pressure on Strategy’s cash management if the company needs to lift the dividend to restore demand.
The dividend stayed at 11.5%, and the market kept selling
The main criticism is straightforward: STRC moved below par, yet Strategy did not raise the payout. The company has kept the dividend at 11.5% for several months. Without a higher yield to attract fresh buyers, the price remained under pressure.
According to the source material, funds raised through STRC are used to add to the company’s Bitcoin holdings, while cash for dividends comes from Strategy’s broader financing model, including ongoing issuance of MSTR common stock to build dollar reserves. If the net asset value premium on MSTR narrows sharply, raising enough cash through at-the-market common stock issuance becomes less efficient. In that case, Strategy would have to rely more heavily on existing dollar reserves, and if those reserves and funding channels weaken, selling Bitcoin to maintain dividend payments becomes a real possibility.
Samson Mow says leverage unwinds, not product failure, drove the decline
Jan3 CEO Samson Mow defended STRC publicly, arguing that the drop below par was driven by leverage-related market liquidations rather than a fundamental flaw in the product itself. In his view, the sell-off reflects market structure, not a broken mechanism.
Mow also said STRC was designed to trade freely in the market, which means prices above or below $100 should not automatically be treated as evidence of failure. He pointed to the income profile as well: investors who buy around $89 can still collect the same dividend stream as those who entered at par. From that angle, the discount may look like an entry point for long-term holders. He added that the product has been live for less than a year, making any final judgment premature.
Strategy now faces three paths, each with a cost
The next move depends on Strategy’s financial choices. One option is to raise the dividend and improve STRC’s appeal directly, though that would require more cash. Another is to sell more Bitcoin to support liquidity, a step that could clash with the company’s core Bitcoin-holding narrative. The third is to wait for broader market sentiment and Bitcoin prices to recover, hoping demand for STRC improves on its own.
For MSTR shareholders, the issue goes beyond the price of one preferred stock. It now touches the credibility of Strategy’s wider funding model, dividend obligations, and Bitcoin treasury strategy. Whether STRC returns toward par or stays under pressure will depend on how much cash the company is willing to commit beyond the current 11.5% payout.