Key Takeaways
- STRC, Strategy’s preferred stock, plummeted to an intraday record low of $83, approximately 17% beneath its $100 par value — marking the weakest performance since launching in July 2025.
- The repurchase of $1.5 billion in convertible notes depleted Strategy’s cash cushion, reducing dividend coverage from an intended 24-month runway to just 6 months.
- Bitcoin’s price has collapsed from over $80,000 in May to approximately $62,500, saddling Strategy with unrealized losses near $11.14 billion across its BTC portfolio.
- CEO Michael Saylor maintained the company remains solvent, noting that combined BTC and cash reserves surpass total debt by roughly $48 billion.
- Skeptics like Peter Schiff have floated fraud accusations, while advocates contend STRC’s framework remains viable provided Bitcoin rallies over the long haul.
On June 18, Strategy’s STRC preferred stock collapsed to an unprecedented intraday bottom of $83, ultimately settling at $88.59 — approximately 17% under its designated $100 par benchmark. Launched in July 2025, the security was engineered to maintain stability around par while delivering an 11.5% annualized return.
This dramatic decline wasn’t an abrupt event. Rather, it emerged from a sequence of corporate maneuvers combined with sustained downward pressure on bitcoin throughout recent weeks.
As recently as May 14, STRC maintained its $100 valuation approaching its monthly ex-dividend milestone, with bitcoin commanding prices north of $80,000. Superficially, the situation appeared stable. Yet bitcoin had already retreated significantly from its October 2024 peak of $126,000.
That identical day, competitor Strive Asset Management unveiled its alternative preferred instrument, SATA, featuring daily dividend distributions with a 13% yield — immediately escalating competitive pressures on Strategy.
The Convertible Note Repurchase That Drained Cash Reserves
The following day, May 15, Strategy revealed plans to buy back $1.5 billion worth of its 2029 convertible bonds at an 8% markdown. The corporation partially financed this transaction by tapping into cash reserves originally earmarked for dividend obligations and debt servicing.
This crucial information wasn’t immediately transparent. When details surfaced on May 26, the reserve balance had shrunk to $871 million — cutting STRC dividend protection from the advertised 24-month buffer down to merely 6 months.
STRC slipped to $99.33 that session. Bitcoin was hovering around $77,000.
Simultaneously, Strategy maintained its bitcoin accumulation strategy. On May 18, the firm acquired 24,869 BTC while prices descended toward $76,000.
June 1 delivered another unexpected development. Strategy offloaded 32 BTC — representing its first bitcoin disposition since 2022. Though the transaction was minuscule, constituting just 0.0038% of total holdings, it triggered market anxiety. MSTR shares declined 5.9% that trading day. Bitcoin retreated to as low as $70,500. STRC finished at $98.07.
Bitcoin’s Descent Intensifies Market Strain
By June 5, bitcoin had breached the $60,000 threshold for the first time since October 2024. STRC plunged to as low as $90 before recovering slightly to close at $93.40.
Strategy shareholders greenlit a transition to semi-monthly STRC dividend distributions on June 8, an adjustment intended to dampen volatility surrounding ex-dividend periods. The company simultaneously disclosed its dollar reserve had rebounded to $1 billion following the purchase of 1,550 BTC.
On June 15, Strategy acquired an additional 1,587 BTC. Cash reserves registered at $1.1 billion.
Then June 18 arrived. STRC bottomed at $83 during trading hours before finishing at $88.59 as bitcoin dropped 2.4% to $62,880. Strive CEO Matt Coles, whose SATA instrument also experienced declines, attributed the selloff to forced liquidations from leveraged positions rather than fundamental credit deterioration.
Strategy currently maintains 846,842 BTC, accumulated at an average basis of $75,656 per token. With bitcoin presently trading around $62,500, the enterprise faces unrealized portfolio losses approaching $11.14 billion.
MSTR common shares trade near $112, representing roughly an 80% decline from their November 2024 record high.
Michael Saylor countered detractors this week, announcing via X that combined BTC and USD holdings currently surpass corporate debt by approximately $48 billion. He drew comparisons to 2022, when liabilities momentarily exceeded reserves by $300 million while BTC languished near $20,000.
Peter Schiff has advocated for shareholder litigation and insinuated that Saylor potentially breached SEC promotional regulations in his STRC marketing efforts. Bitcoin proponent Samson Mow characterized STRC as a “brilliant instrument,” maintaining there’s nothing fundamentally flawed about the structure unless one assumes bitcoin won’t appreciate over extended timeframes.
