Strategy’s (NASDAQ: MSTR) preferred stock (NASDAQ: STRC) fell to $91.79 on June 16, raising concerns over its 11.50% yield sustainability amid Bitcoin’s 50% decline from record highs.

Key Highlights

  • The stock, designed to trade near its $100 par value, has remained below that threshold since its June 15 ex-dividend date.
  • STRC’s 11.50% dividend yield is among the highest in public markets, but analysts question its long-term viability.
  • Bitcoin (NYSE American: BTC), which backs the preferred stock, is 50% below its $126,000 all-time high, pressuring STRC’s performance.
  • Strategy has enough cash to cover seven months of dividends but plans to shift STRC to a bi-monthly payout schedule in July.

The stock, introduced in 2025, has struggled to recover since its May 15 ex-dividend date, when it last traded at par. The persistent discount reflects broader concerns about the sustainability of its 11.50% yield, one of the highest among publicly traded securities. Strategy’s holdings in the cryptocurrency underpin STRC’s value, and the digital asset’s volatility has amplified investor unease.

Analysts note that the correlation between STRC and Bitcoin has intensified, leaving the preferred stock vulnerable to further crypto market swings. The 11.50% yield, while attractive, has raised doubts about its long-term feasibility. In response, Strategy announced plans to transition STRC to a bi-monthly dividend schedule starting in July, splitting the same annualized yield into two monthly installments.

The broader market’s shift away from high-yield, crypto-linked securities has weighed on both stocks. Investors appear to be reassessing the risk-reward balance of STRC, particularly as Bitcoin’s recovery remains uncertain. The move to bi-monthly dividends aims to attract income-focused investors while maintaining the 11.50% yield.

Investor Insights

However, the company’s ability to sustain this approach may hinge on a rebound in cryptocurrency prices. Investors should monitor Bitcoin’s price trajectory and Strategy’s cash burn rate as key indicators of STRC’s stability. The shift to bi-monthly dividends could either stabilize the stock or accelerate outflows if confidence in the payout wanes.

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.