Strategy's Preferred Stock Slips Below Par, Testing the Bitcoin-Treasury Funding Model

Strategy, the corporate Bitcoin holder formerly known as MicroStrategy, has built its treasury on preferred shares and convertible notes. One of those instruments, the Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), is designed to trade at its $100 par value. This week it did not. STRC fell to a low near $83 and closed one session at $89, its weakest level since the security launched in July 2025, about 11% below the price it is designed to hold.

The sum of money involved was small, but the signal was not. Strategy disclosed on June 1 that it had sold 32 Bitcoin for roughly $2.5 million in late May to fund STRC distributions, its first Bitcoin sale since 2022. Because the preferred shares now trade below par, the company has paused issuing new STRC shares through its at-the-market program, which limits its ability to keep buying Bitcoin.

Adam Back, the chief executive of Blockstream and an early Bitcoin cryptographer, argued that the sale is a feature rather than a flaw, saying it shows the treasury can meet its obligations to investors from its holdings when needed. Skeptics read the same facts differently. They see a company forced to sell the asset it exists to accumulate in order to pay dividends on instruments trading below par, which they say reveals the strain in an accumulation model funded by debt and preferred stock while Bitcoin trades near $64,000.

The underlying question is about how the financing is structured, not about loyalty to Bitcoin. STRC holders were promised a stable instrument priced near par. When the cost of funding that promise rises faster than the value of the underlying asset, the difference appears as a discount to par and a pause in new issuance.