Strategy’s Preferred-Stock Crisis Exposes the Cracks in a Once-Invulnerable Bitcoin Financing Model

For years, the market consistently valued Strategy at a premium to its Bitcoin stash, rewarding management’s aggressive acquisition spree. That premium has now evaporated. For the first time, the company’s enterprise net asset value (mNAV) has fallen below 1.0, closing at 0.99 on Friday — a structural break that signals investors no longer see a safety cushion in the Bitcoin treasury. The equity market is effectively valuing the firm at less than its holdings of 847,363 coins.

The resulting stock slide has been brutal. Strategy shares traded at €73.42 as of the latest session, a whisker above the 52-week low of €71.91 set just days ago. The stock has shed nearly 46% since January and roughly 79% over the past twelve months. The relative strength index (RSI) now sits at 24, flashing an oversold condition that technical analysts often associate with extreme bearishness.

At the heart of the meltdown is STRC, Strategy’s variable-rate Series A perpetual preferred stock — the vehicle that has funded much of the Bitcoin buying. STRC currently trades about 25% below its $100 par value, having hit an all‑time low of $71.25 on June 26. That discount makes issuing new shares below par economically unfeasible, so the company has effectively paused its at‑the‑market (ATM) offering for STRC, cutting off a critical source of new capital for cryptocurrency purchases.

The structural mismatch is stark. With a coupon of 12% on roughly $5 billion of STRC shares outstanding, the annual dividend bill runs to almost $603 million. Operating revenue, by contrast, is only about $477 million. The gap is not covered by business cash flow but must be plugged from capital‑market activities — a source that is now sputtering. Total preferred‑stock dividend obligations have quadrupled since the start of the year to $1.2 billion, according to separate disclosures, further straining the balance sheet.

Should investors sell immediately? Or is it worth buying Strategy?

All eyes are now on the next dividend reset scheduled for Monday, June 30. STRC started life in July 2025 with a 9% annual coupon, and Strategy has raised the rate seven times since, most recently to 11.50%. Because the effective market yield on the preferred has climbed to roughly 15%, investors expect another increase of at least 50 to 100 basis points, bringing the coupon to 12.00%–12.50%. Grayscale analyst Zach Pandl anticipates a 50‑basis‑point increment. The same day also serves as the ex‑dividend date; holders will receive $0.48 per share on July 15, a payout that amounts to less than 0.7% of the current share price.

The financial pressure is now drawing legal scrutiny. The Rosen Law Firm is investigating whether Strategy and its top executives, including founder Michael Saylor, misled investors about the company’s business model and Bitcoin strategy. The probe covers multiple securities — MSTR, STRC, STRK, STRF, and STRD. Separately, the Signal Law Group issued a “Vigilant Risk Score” of 65 (yellow) on June 27, noting elevated risk but stopping short of alleging any misconduct.

Michael Saylor, meanwhile, has not wavered. Over the weekend he signaled additional Bitcoin purchases, even as the cryptocurrency trades well below Strategy’s average acquisition cost of $75,653 per coin. The company’s total Bitcoin holdings are currently valued at roughly $50.9 billion — well below that cost after the recent drop below $60,000. The slide has already forced a rare sale of Bitcoin in the first quarter of 2026, a departure from the long‑held “buy and hold” mantra, and contributed to a massive quarterly loss of $12 billion.

Strategy still has some buffer, but it is limited. The company reports $2.21 billion in liquidity, enough to cover STRC’s annual dividend payments for about ten months. It also maintains an ATM for its common stock (MSTR) with up to $25.4 billion in unused capacity — a channel it could still tap, but one that would come with severe dilution at current depressed prices. Any recovery for STRC hinges not on tweaking the dividend rate but on a sustained rebound in Bitcoin’s price above $75,653. Until then, the reset on June 30 will remain a palliative, not a cure.