Strategy’s preferred stock STRC has continued to trade below its intended anchor, with its market price falling more than 11% under the $100 target value. The gap has placed pressure on the company’s capital flywheel model, which relies on STRC financing to support further Bitcoin purchases, and has raised questions about the stability of that structure.
STRC Price Weakness and Dividend Pressure
The dividend rate on STRC has been raised to 11.5% in an effort to repair the price, but the adjustment has not brought the security back near its target value. The continued weakness after a higher dividend points to a loss of confidence in STRC as a financing instrument, particularly in relation to its role in sustaining Strategy’s Bitcoin accumulation approach.
The main concern now centers on Strategy’s cash liquidity and the pressure created by dividend obligations. The market is worried that, if cash flow is insufficient to meet those obligations, the company could be forced to sell Bitcoin to pay dividends. Such a move would further challenge the perceived resilience of its overall capital structure.