Strategy’s preferred stock STRC has continued to trade away from its intended level, with its market price falling more than 11% below the $100 target par value. The decline has brought renewed scrutiny to the company’s capital flywheel model, under which STRC financing is used to support additional Bitcoin purchases. The issue is no longer limited to the cost of financing; it has become a question of whether the market still trusts the structure behind that financing.
Higher Dividend Rate Fails to Repair STRC Pricing
After STRC remained below its target par value, Strategy raised the dividend rate to 11.5%. However, the adjustment has not been enough to restore the stock’s price to the intended level. The persistent de-pegging is being viewed as a direct sign of pressure on Strategy’s financing instrument and as evidence of investor concerns around the preferred stock’s valuation and payment capacity.
The market’s concerns focus on whether Strategy has sufficient cash liquidity to meet its dividend obligations, and whether the company could be forced to sell Bitcoin in order to make those payments. If that pressure continues to feed through the structure, the stability of Strategy’s broader capital framework—built around STRC issuance and Bitcoin accumulation—will face a tougher test.