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Odaily reports that STRC, the dividend-paying preferred stock issued by the Bitcoin treasury company Strategy (MSTR), recently fell below its $100 par value, sparking market attention on its high-yield dividend model, cash reserves, and Bitcoin asset strategy. STRC was originally designed as a high-yield, low-volatility preferred stock anchored to a $100 par value, aiming to attract investors through ongoing dividends and to help Strategy raise capital via ATM (at-the-market) offerings to support dividend payments. However, the recent Bitcoin price decline combined with a series of capital moves by the company caused STRC’s price to diverge sharply from its target level. Here is the timeline of this downturn: May 14: STRC closed at $100 before ex-dividend day, with Bitcoin price still above $80,000. Market pressures were emerging, as competitor product SATA announced a daily dividend mechanism offering a 13% yield, increasing competition for STRC. May 15: Strategy announced it would repurchase $1.5 billion in 2029 convertible bonds at about an 8% discount. The market subsequently noted that the company's USD reserves, previously set aside to support dividends and debt payments, were used for this transaction. May 26: Strategy confirmed that cash reserves were used in the bond buyback. The relevant funds decreased to about $871 million, covering roughly 6 months of STRC dividends, whereas the company's prior goal was to maintain about 24 months of coverage. June 1: For the first time since 2022, Strategy sold 32 BTC to demonstrate its ability to support dividends through asset sales. Following the announcement, MSTR shares fell by 5.9%. June 5: Bitcoin dropped below $60,000, STRC fell to near $90, closing at $93.4. June 8: Strategy shareholders approved a plan to adjust STRC dividend frequency from once per month to twice per month; the company also indicated that USD reserves had recovered to $1 billion. June 15: Strategy purchased another 1,587 BTC, bringing USD reserves up to $1.1 billion. June 18: STRC fell below $83 intraday, about 17% below its $100 target price, marking a new low since its July 2025 listing, and ultimately closed at $88.59. Currently, Strategy holds about 846,842 BTC at an average cost of $75,656. With Bitcoin at approximately $62,500, the company’s unrealized losses are around $11.14 billion. Meanwhile, the market is also starting to focus on the potential dilution pressure brought by Strategy's recent fundraising activities. MSTR is now priced at about $112, down around 80% from its all-time high in November 2024. Analysis suggests that STRC's core challenge is the tight binding of its financial structure to Bitcoin's price: when BTC enters a correction cycle, the market not only reassesses Bitcoin itself but also starts to reevaluate the preferred stock, debt, and financing systems built around Bitcoin. (CoinDesk) The current market focus is whether STRC can return to its $100 par value and whether Strategy's Bitcoin capital model can be sustained.

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The collapse of STRC preferred shares involved a range of factors including bond repurchase, reduced cash reserves, and the Bitcoin bear market, which together led STRC to face parity challenges.