The slide deepened a steep drawdown for the stock, which crypto key opinion leader Ted Pillows said had fallen roughly 81% from its peak, erasing about $153 billion in market value.
- Strategy’s' variable-rate perpetual preferred stock traded near $84, below its $100 par value, straining the funding model driving its Bitcoin buying.
- Julio Moreno calculated Strategy would require $2.8 billion in reserves to restore 24 months of coverage against $1.2 billion in annualized dividend commitments.
- Benchmark analyst Mark Palmer reiterated a 'Buy' and $570 price objective on MSTR and described STRC's decline as a market-driven reset of necessary yield rather than a structural breakdown.
Strategy (MSTR) stock fell below $100, dropping to its lowest in two years on Wednesday as pressure built around the company's Bitcoin (BTC)-heavy balance sheet and the funding model behind its preferred shares.
The stock closed at $103.84 on Friday — down about 5%, as on-chain analytics firm CryptoQuant urged the company to pause Bitcoin purchases and rebuild cash reserves while its variable-rate perpetual preferred stock (STRC) traded below the $100 par value it is designed to hold.
Strategy held 847,363 BTC as of June 21, worth roughly $53 billion at current prices, and had increased its cash reserve to about $1.4 billion. Crypto key opinion leader Ted Pillows said on X that MSTR had fallen roughly 81% from its peak, erasing about $153 billion in market value.
Cash Comes First
In a Tuesday report, CryptoQuant Head of Research Julio Moreno said Strategy should pause Bitcoin purchases until its cash reserves and dividend coverage recover.
Moreno said dividend coverage had fallen from more than seven years to about 14 months, and estimated the firm may need roughly $2.8 billion in reserves to restore 24 months of coverage. Moreno said annualized dividend obligations had climbed to about $1.2 billion, shifting the focus from how much Bitcoin Strategy can buy to whether it has the cash flexibility to cover its preferred dividends and debt interest while BTC stays under pressure.
On Stocktwits, MSTR was the top trending ticker. MSTR’s price was down over 6% in early morning trade. Retail sentiment around MSTR remained in the 'extremely bullish' zone, while chatter stayed at 'high' levels over the past day.
Why STRC Below $100 Matters
STRC traded near $87.31, below its $100 par value. A preferred stock sits above common stock in the capital structure and typically pays a dividend. "Variable-rate" means the dividend rate can adjust, and "perpetual" means the security has no fixed maturity date.
Strategy said STRC's dividend rate is reset monthly to encourage the stock to trade around its $100 par value trading at $84. The preferred currently carries an 11.5% annual dividend rate based on that stated amount, though Strategy has said cash dividends are not guaranteed. If STRC stays below par, investors may demand a higher effective yield to hold it, making preferred-stock funding less efficient for the company.
Buying No Longer A Clear Catalyst
CryptoQuant CEO Ki Young Ju said on X on Wednesday that Strategy's Bitcoin buying now looked more like a "liquidity sink" than a price catalyst. He said the company should pause purchases, rebuild reserves, and adopt a more systematic Bitcoin-buying framework.
Benchmark analyst Mark Palmer offered a counterpoint, describing STRC's slide as a market-driven reset in required yield rather than a structural breakdown. His view suggested Strategy's funding model was strained but not broken. However, Palmer reiterated a ‘Buy’ and a $570 price target on MSTR in the same note, roughly over 400$ upside from the June 22 close.
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