According to MarsBit, the preferred stock STRC issued by Strategy, with a face value of $100, is currently trading at a discount, with its price falling to $88.59, representing a discount of approximately 11.4%. The effective annualized yield has thus risen to over 12.9%. The sharp decline in Bitcoin's price and shaken market confidence are the main drivers behind the discount.
STRC's dividend payment mechanism was originally designed to rely on the continuous appreciation of Bitcoin and ongoing capital raising through at-the-market (ATM) offerings to sustain payouts. However, the situation has reversed: ATM issuances have been suspended, Bitcoin purchases have slowed, and there have been small-scale sales of Bitcoin to cover dividend payments. These developments have sparked strong skepticism among investors about whether the preferred stock is falling into a 'death spiral' or exhibits characteristics of a Ponzi structure.
The current debate between bulls and bears centers on whether Strategy can fulfill its dividend obligations without further Bitcoin sales. Key points to watch include Bitcoin's price trajectory, the resumption of fundraising activities, and whether more Bitcoin sales for dividend payment occur. The market is closely monitoring the sustainability of this structure.