Strategy's STRC slips below $99 as cash reserve drops 63% to $871M

Strategy's perpetual preferred security Stretch (STRC) fell as low as $97.11 on May 29 as bitcoin slipped to the $73,000 mark, breaching the $100 par value the company has worked to maintain as a capital-raising anchor.

"The repurchase shows Strategy's continued focus on liability management," Chief Financial Officer Andrew Kang said, describing the $1.38 billion buyback of $1.5 billion in zero-coupon convertible notes due 2029 as positive for both equity and credit investors.

Strategy funded the buyback from its U.S. dollar reserve, which declined to about $871 million from roughly $2.25 billion at the start of 2026 — a 63 percent drop. The company originally established the reserve in December 2025 at $1.44 billion, describing it as a cash cushion to support preferred stock dividends and interest payments on outstanding debt. At its peak, the reserve covered more than 24 months of dividend payments. After the buyback, it covers about six months of the company's estimated $1.7 billion in annual preferred dividend obligations across its four preferred stock series: STRC, STRK, STRF, and STRD.

The reduced cash buffer raises questions about Strategy's ability to continue using STRC as an efficient capital-raising vehicle through its at-the-market issuance program. STRC tends to face selling pressure during bitcoin drawdowns and in the days following its ex-dividend date, as seen on Nov. 20 and Feb. 5. The company has proposed shifting STRC dividend payments from monthly to semi-monthly to stabilize the price around its $100 par value, with a shareholder vote scheduled for June 8. Executive Chairman Michael Saylor said in a recent interview with CoinDesk that management could sell bitcoin, issue additional MSTR equity when the stock trades above a 1.22x multiple to net asset value, or raise capital through STRC issuance to meet dividend obligations, prioritizing actions accretive to bitcoin per share.

Competing bitcoin treasury company Strive Asset Management has taken a different approach with its perpetual preferred security SATA, which has remained tightly anchored around its $100 par value while offering a dividend yield of approximately 13 percent. Strive has also eliminated all debt inherited through its acquisition of Semler Scientific and announced plans for daily dividend payments on SATA. Over the past three months, Strive shares have gained about 110 percent, compared with a 12 percent rise in MSTR and an 8 percent increase in bitcoin, suggesting investors may be rewarding Strive's cleaner balance sheet and higher-yielding preferred structure.

MSTR closed at $154.20 on May 28, down 58 percent over the past 12 months. Strategy holds 843,738 bitcoin as of its most recent disclosure. CFO Kang said the company plans to rebuild its cash reserve through additional MSTR common stock sales and STRC preferred sales, a process that would again place common shareholders at the center of the funding mechanism.

This article is for informational purposes only and does not constitute investment advice.