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06/18 07:47

Strategy’s STRC preferred stock slides 11% below p

Strategy’s STRC preferred stock slides 11% below par as Bitcoin treasury model faces market skepticism STRC, Strategy’s variable-rate perpetual preferred stock, ended at $89.15 per share on June 17, more than 11% below its $100 par value. The drop has raised fresh questions about investor appetite for Bitcoin-backed yield instruments. STRC was designed to offer a variable dividend while helping Strategy raise capital for its Bitcoin treasury strategy, but its widening discount now signals pressure on that funding model. Investors who bought near par have already absorbed a mark-to-market loss roughly equal to a full year of STRC’s current 11.5% annual dividend rate. Euro Pacific chief economist and global strategist Peter Schiff criticized the structure on X, describing it as a dangerous trap for “risk-averse retirees.” STRC slips below par as yield doubts grow STRC’s fall below par matters because the instrument is central to Strategy’s preferred-stock funding strategy. The security is supposed to trade close to $100, with the variable dividend rate helping stabilize demand. But the drop to around $89 suggests investors are demanding a higher effective yield or questioning the durability of the payout. Reports on June 18 say that the market is betting on higher yields, citing waning confidence in STRC’s dividend stability and Strategy’s funding strategy for future Bitcoin purchases. Schiff argued that Strategy may face a difficult choice. If the company raises STRC’s yield toward 13%, it could stabilize the preferred stock but increase the cost of capital. If it does not raise the yield, STRC could remain under pressure. Strategy points to Bitcoin reserves for coverage Strategy moved to reassure holders on June 17, posting on X that it has “32 years of dividend coverage through our $BTC Reserve.”#2026 World Cup Posting Challenge on HTX Square #HTX Creation Challenge — Post and Win 1,500U 💥

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