STRC, the dividend-paying preferred equity issued by bitcoin treasury firm Strategy (MSTR), dropped below $83 on Thursday — a 17% discount to its $100 par value and the lowest since its July 2025 debut. The security was designed to be high-yield and low-volatility, with stable pricing around par critical for Strategy to efficiently raise capital through ATM offerings to fund its annualized 11.5% payout.
In recent weeks, the sharp decline in bitcoin from its October record of $126,000 to around $76,000, combined with a series of management decisions on capital allocation, has pushed STRC well below its intended trading level. Here is the timeline:
May 14: Par held on ex-dividend day, but underlying cracks emerged
STRC closed at $100 heading into its monthly ex-dividend date; bitcoin was still above $80,000. Below the surface, bitcoin was already far from its peak, and STRC had only managed to hold $100 in the run-up to the ex-dividend, not consistently through the month. Meanwhile, Strive Asset Management announced its competing security SATA would pay dividends daily at a 13% yield, piling pressure on Strategy as it sought shareholder approval to switch STRC from monthly to semi-monthly dividend payments to reduce ex-date volatility.
May 15: Convertible note buyback; bitcoin slides to $78K
Strategy announced it would repurchase $1.5 billion of its 2029 convertible notes at an 8% discount. The buyback was partly funded using a dollar cash reserve established at end-2025 to backstop dividends and debt obligations — a use that was not disclosed at the time. Bitcoin dropped to $78,000.
May 18: Bitcoin slips toward $76K; Strategy buys 24,869 BTC
As the largest cryptocurrency slid toward $76,000, Strategy purchased another 24,869 BTC. At that point the company carried over $8 billion in convertible debt, while Strive had none. The decision to keep adding bitcoin even as price fell, combined with the cash reserve being tapped for debt repurchases, deepened market concerns about STRC's dividend coverage, sending the preferred stock below par.