Strategy's $1.5B Debt Payoff Hits Preferred Stock STRC, Dividends at Risk
Strategy paid off $1.5B in debt, reducing its cash cushion for STRC preferred stock dividends to about 7 months. STRC closed at $91.79, well below par, while rival Strive's SATA offers daily dividends and zero debt.
MicroStrategy's preferred stock STRC fell to $91.79 on Tuesday, its third lowest close since launching in July 2025. The price has exhibited a predictable monthly pattern: spiking toward par just before ex-dividend dates and then bleeding lower. This occurs because traders buy to capture the monthly dividend and sell immediately after.
Strategy attempted to mitigate this by switching to semi-monthly payments, but rival Strive, which issues the SATA preferred stock, went further by moving to daily dividend payments. That change eliminates the ex-dividend volatility entirely.
The more significant issue is the balance sheet. Strategy used cash reserves to repay $1.5 billion of convertible debt earlier this year, slashing its dividend runway from 24 months to roughly 7 months. Cash reserves now stand at approximately $871 million. In contrast, Strive carries zero debt and holds over 18 months of SATA dividend coverage in cash and liquid securities.
Strategy will raise its dividend rate to 12% in July, with further increases likely in August. However, if Bitcoin prices drop further, the timeline to rebuild the cash cushion may extend, as new buyers become less willing to absorb the depeg at current levels. The question remains whether STRC can recover to par before more holders shift to SATA.
Source: Cointelegraph