Strategy shares drop 6% after STRC preferred falls below par

Strategy’s shares fell about 6% to near $109 after the company’s Stretch preferred stock, STRC, dropped to $87, below its $100 par value. The decline forced Strategy to pause its at-the-market issuance program, a funding channel the company uses to raise cash for bitcoin purchases.

In late May, Strategy sold 32 bitcoin for roughly $2.5 million to cover dividend payments on STRC. That was the first bitcoin sale since the company began accumulating the asset in 2022. Chair Michael Saylor previously resisted selling the company’s bitcoin holdings. Analysts at Benchmark and TD Cowen view the sale as a one-off transaction and do not treat it as proof of a broader breakdown in the firm’s bitcoin approach.

Insider stock sales added selling pressure. Director Jarrod Patten exercised options on 1,500 Class A shares at a strike price of $18.236 and sold those shares at about $134 each, producing roughly $200,000. Over the past three months Patten sold 55,750 Strategy shares for nearly $9 million in proceeds; he retains 28,406 Class A shares and 44,250 unexercised director options. Earlier in the year Chief Executive Officer Phong Le, Chief Financial Officer Andrew Kang and former executive vice president Wei‑Ming Shao also sold millions of dollars’ worth of company stock.

Competitive pressure in the preferred securities market has affected demand for STRC. A rival preferred issued by Strive trades above $99 and yields about 13.7%, drawing income-focused buyers away from Strategy’s preferred securities at STRC’s current price.

Market maker QCP estimated Strategy has about 7.5 months of liquidity to cover preferred dividend payments at current levels. QCP said the company could need additional capital raises, accept more shareholder dilution, or sell more bitcoin if liquidity tightens.

Broader market conditions have contributed to the pressure on crypto-related equities. The Federal Reserve on June 17 left its benchmark rate at 3.50% to 3.75% and projected that nine of 18 Federal Open Market Committee members expect at least one rate increase before the end of 2026. Bitcoin has been trading near $64,000; Strategy’s holdings carry an average paper loss of about $11,658 per coin versus the company’s acquisition cost.

Strategy, formerly known as MicroStrategy, built its treasury model around issuing preferred securities and other capital instruments to fund bitcoin accumulation. With STRC trading below par and the at-the-market program paused, the company suspended preferred-funded bitcoin purchases.