Timeline of STRC Falling Below $100: Strategy's Bitcoin Capital Model Faces a Stress Test

Odaily reported that the dividend-paying preferred stock STRC issued by Bitcoin treasury company Strategy (MSTR) recently fell below its $100 face value, drawing market attention to its high-yield dividend model, cash reserves, and Bitcoin asset strategy. STRC was originally designed as a high-yield, low-volatility preferred stock pegged at $100, attracting investors through sustained dividends and helping Strategy fund dividend payments via ATM (At-The-Market) offerings. However, the recent decline in Bitcoin's price, coupled with a series of the company's capital maneuvers, has caused STRC's price to deviate significantly from its target level. Here is the timeline of this price decline event:

May 14: Before the ex-dividend date, STRC closed at $100, with Bitcoin still priced above $80,000. However, market pressure had already begun to show. A competing product, SATA, announced the adoption of a daily dividend mechanism, offering a 13% yield and increasing competitive pressure on STRC.

May 15: Strategy announced a repurchase of $1.5 billion in its 2029 convertible notes at approximately an 8% discount. The market then noted that the company's dollar reserves, previously set aside to support dividend and debt payments, were used for this transaction.

May 26: Strategy confirmed that cash reserves were involved in the bond repurchase, with the related fund size dropping to approximately $871 million. This amount equates to about six months of STRC dividend coverage, whereas the company's previous target was to maintain coverage for about 24 months.

June 1: For the first time since 2022, Strategy sold Bitcoin, offloading 32 BTC to demonstrate its ability to support dividends through asset sales. Following the announcement, MSTR's stock price fell by 5.9%.

June 5: Bitcoin fell below $60,000, with STRC dropping to around $90 and closing at $93.4.

June 8: Strategy shareholders approved a change to the STRC dividend payment frequency, shifting from once a month to twice a month. The company also stated that its dollar reserves had rebounded to $1 billion.

June 15: Strategy purchased an additional 1,587 BTC, increasing its dollar reserves to $1.1 billion.

June 18: STRC fell below $83 intraday, approximately 17% lower than its $100 target price, marking a new low since its listing in July 2025. It eventually closed at $88.59.

Currently, Strategy holds approximately 846,842 BTC, with an average cost of around $75,656. Based on a Bitcoin price of roughly $62,500, the company's paper unrealized loss stands at approximately $11.14 billion.

Meanwhile, the market has begun to focus on the potential dilution pressure arising from Strategy's recent financing activities. MSTR's current price is around $112, down approximately 80% from its all-time high in November 2024.

Analysts believe that the core challenge facing STRC lies in its financial structure being highly correlated with Bitcoin's price: when BTC enters an adjustment cycle, the market not only re-evaluates Bitcoin itself but also begins to scrutinize the preferred stocks, debts, and financing systems built around it. (CoinDesk)

The current market focus is on whether STRC can recover to its $100 face value and whether Strategy's Bitcoin capital model can continue to be sustained.