Strategy's STRC Preferred Stock Slips to Multi‑Year Low as Dividend Coverage Collapses

Strategy (formerly MicroStrategy) saw its forecast dividend coverage shrink dramatically, losing roughly 40 years of coverage in just seven months. The decline stems from a combination of a 30% drop in Bitcoin’s price, which underpins the company’s balance sheet, and aggressive dilution of its dividend‑paying preferred shares, which raised the total face value of the STRC issue from $2.8 billion to $10.5 billion.

The flagship preferred share, STRC, closed at $91.79, its third‑lowest close since inception and well below the $100 par value the firm targets. The market is demanding a higher yield as Bitcoin retreats and rival preferred products offer more attractive terms. Analysts note that about 86 % of STRC’s yield spread moves with Bitcoin’s price, and investors would need the dividend increased to roughly $12.60 to bring the price back toward par. The situation highlights the vulnerability of Bitcoin‑linked income products to crypto price swings and the pressure on Strategy’s capital‑raising mechanisms.

If the company raises the dividend modestly, the stock could regain parity, but the current discount underscores investor concern over the firm’s expanding capital structure and its reliance on Bitcoin holdings.