Strategy’s flagship preferred stock Stretch (STRC) hit another record low on Friday, dropping to $71.25 before recovering slightly to $75.30. That’s a 25% decline from its designed trading level — and it’s making investors nervous.
Executive Chairman Michael Saylor played it cool in a social media post, saying “volatility tests every capital structure” and emphasizing the company’s focus on “disciplined capital allocation, credit quality, and long-term value creation.”
Bitcoin’s been struggling too. After hitting a 21-month low of $58,188 on Thursday, it recovered slightly to around $60,130. Strategy’s stockpile of 847,363 BTC is now worth roughly $51 billion — about $13.1 billion underwater from its acquisition cost.
Analysts are increasingly focused on the company’s capital structure. Strategy has issued over $10 billion in STRC in less than a year, and its cash cushion for managing dividends and debt has thinned significantly since January.
Nic Carter of Castle Island Ventures suggested Strategy may need to raise STRC’s dividend for an eighth time since its introduction. The stock currently offers 11.5% annually, but investors are effectively demanding over 15% yield at current prices.
“The structure is unsustainable and requires the perpetual monetization of the common equity,” Carter said. “It will continue to trade at a discount unless Strategy hikes the yield to the appropriate range — which is 15-20% in my opinion.”
Strategy’s common stock fell as low as $82.33 before ticking up to $85.80 on the day.
