Strategy STRC Falls Below Face Value, Cash Reserves and Dividend Pressure Under Scrutiny

On May 29, according to CoinDesk, Strategy's perpetual preferred stock STRC fell to $97.11 at one point on Thursday, closing at $98.57, deviating from its $100 par value target, raising market concerns about its ability to continuously finance through ATM. The report stated that after Strategy recently repurchased $1.5 billion in 0% convertible bonds due in 2029 with cash, its US dollar cash reserves decreased from approximately $2.25 billion to $871 million, which can only cover about half a year of its current annual preferred stock dividend obligation of about $1.7 billion, far below the originally set 24-month coverage period. Company Chairman Michael Saylor stated that future fundraising may involve selling Bitcoin, issuing additional shares when MSTR's premium is higher than 1.22 times NAV, or continuing to issue STRC, with the focus of the decision being to ensure that "Bitcoin per share" is not diluted. In contrast, competitor Strive's SATA preferred stock remained around $100, with a dividend yield of about 13%, and the company has cleared all debts assumed from the acquisition of Semler Scientific.