STRC, the Variable Rate Series A Perpetual Stretch Preferred Stock issued by Strategy (MSTR), the largest corporate holder of bitcoin, dropped below its $100 stated value in pre-market trading after its latest monthly dividend payment. The move largely reflects routine ex-dividend mechanics—buyers on or after the ex-dividend date will not receive the next payout.
STRC currently offers an 11% annualized yield on the $100 stated amount. Historically, ex-dividend price declines have been as much as 2%, with frequent recoveries back toward par, as seen in October and December. However, after the August and November dividend dates, STRC experienced price drops of over 6% driven by broader volatility, before eventually rebounding.
Recent trading volume suggests that an estimated 40% of at-the-money issuance as a share of total volume would translate to roughly 2,280 bitcoin purchased via STRC proceeds from Monday through Wednesday.
Bullish Case: High Yield Attracts Dip Buyers
Bullish proponents point to quick recoveries back to $100 or higher, with sustained high volume on dips signaling strong demand for an 11%+ yield. A fast rebound would deliver attractive returns for buyers at discounted prices.
Bearish Risk: Sub-$99 Pricing Could Force Rate Hikes
The bearish scenario includes prolonged sub-$99 pricing, as seen in November, which could force aggressive future rate hikes on the preferred stock and an overwhelming supply from continued issuance, both depressing prices further.
For now, STRC's price action is primarily driven by the technical adjustment after the ex-dividend date. Whether it stabilizes near par depends on bitcoin market sentiment and Strategy's ongoing capital-raising pace.