MicroStrategy’s STRC preferred stock dropped to a record low on Thursday, closing well under its $100 par value. This decline weakens a key channel the company uses to raise cash for Bitcoin (BTC) purchases. The slide has renewed concern that MicroStrategy may sell more Bitcoin to fund the stock’s dividend. The firm holds about 846,842 BTC.
STRC closed at $88.59 on Thursday, marking a new all-time low, according to market data. The stock also touched an intraday low of $82.5 during the trading session. Over the past month, it has fallen more than 10%. This recent pullback coincided with weakness in Bitcoin’s price and a more hawkish stance from the Federal Reserve. Nine of the 18 FOMC participants now expect at least one rate hike in 2026.
The decline in STRC carries two implications for MicroStrategy’s Bitcoin strategy. Both implications trace back to how STRC funds the company’s purchases. STRC is engineered to trade near $100. It pays an 11.5% annual dividend rate for June, which has remained unchanged for a fourth straight month.
The first impact affects MicroStrategy’s funding channel. The design only works while STRC trades near or above $100. At this point, Michael Saylor’s firm issues new shares and uses the proceeds to buy Bitcoin. With STRC roughly $11 below par, that mechanism strains. Selling shares at well under $100 per share raises less cash per share and narrows a core funding channel.
The second impact raises the prospect of Bitcoin sales. An X commentator, Bull Theory, argued that MicroStrategy would need to lift the dividend rate to restore the peg. A higher rate, however, means a larger annual cash obligation. MicroStrategy currently funds that obligation by selling MSTR shares.
The constraint is MSTR’s net asset value premium, which has compressed toward 1x. That leaves little room to dilute further, Bull Theory said, a squeeze that could push MicroStrategy toward selling Bitcoin. “When Strategy sold just $2 million worth of Bitcoin last time, the price dropped 20%. If Strategy is forced into becoming a consistent seller, the impact on Bitcoin would be significant,” the analyst wrote.
MicroStrategy CEO Phong Le has previously stated that the firm could sell BTC when that option is better than issuing equity to pay Stretch preferred stock dividends. The selloff has split commentators, with Peter Schiff, a longtime Bitcoin critic, framing the situation as a validation of his views.
The unresolved question remains whether MicroStrategy will adjust its dividend strategy or resort to Bitcoin sales to manage its funding obligations. Investors will be watching for any shifts in the company’s approach to maintaining its preferred stock’s value and its substantial Bitcoin holdings. The MicroStrategy share performance and Bitcoin’s price movements will continue to influence these decisions.