Strategy (NASDAQ: MSTR) preferred stock (NASDAQ: STRC) fell to $91.79 on June 16, raising doubts over its 11.50% yield 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 for publicly traded securities, but analysts question its sustainability.
  • Bitcoin’s 50% drop from its $126,000 all-time high has pressured STRC, which is backed by the company’s crypto holdings.
  • Strategy plans to shift STRC to a bi-monthly dividend schedule starting in July, maintaining the same annualized yield.

Preferred Stock Slumps

Strategy’s preferred stock (NASDAQ: STRC) extended its decline on June 16, settling at $91.79, a level not seen since its 2025 debut. The stock, structured to trade near its $100 par value, has struggled to recover after falling below that mark on its June 15 ex-dividend date. Investors typically expect preferred shares to rebound post-ex-dividend, but STRC has failed to regain footing amid broader market skepticism.

The preferred stock is backed by Strategy’s Bitcoin holdings, tying its value directly to crypto market movements. As Bitcoin’s price fluctuates, so does investor confidence in STRC’s ability to maintain its high-yield payouts, which currently stand at an 11.50% annualized rate. The 11.50% yield, while attractive, has raised red flags about long-term viability.

Strategy has responded by doubling down on its dividend strategy, announcing plans to split payouts into bi-monthly installments starting in July, though the annualized yield remains unchanged. The decline reflects broader pressures on crypto-linked equities, as well as concerns over the company’s aggressive dividend policy. The move aims to smooth cash flow without altering the 11.50% annualized yield.

However, the adjustment does little to address the core issue: whether the company can sustain such high payouts amid Bitcoin’s prolonged downturn and its own declining stock price. Investors will watch for signs of dividend cuts or further declines in Bitcoin, which could exacerbate STRC’s discount to par. For now, the stock’s elevated yield remains a double-edged sword, attractive to income seekers but increasingly precarious as market conditions evolve.

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