Strategy’s Bitcoin Treasury Model Strained as STRC Preferred Stock Trades Below Par

Cantor Fitzgerald has identified restoring Strategy Inc.’s STRC preferred stock to its $100 par value as the company’s foremost financial priority, warning that the instrument’s persistent discount is undermining the capital-raising apparatus that has underpinned its Bitcoin accumulation strategy. The investment bank’s analysts have recommended investors buy either the discounted preferred shares or Strategy’s common stock, betting that the company will succeed in repairing the mechanism.

Strategy, the firm formerly known as MicroStrategy and widely regarded as the corporate standard-bearer for Bitcoin treasury holdings, has relied on issuing preferred securities such as STRC to fund its purchases of the cryptocurrency. That model depends on the preferred stock trading close to face value; when it trades below par, new issuance becomes prohibitively expensive, according to Cantor Fitzgerald.

A capital-raising engine stalled by a discount

STRC currently trades between roughly $86 and $88, a discount of 12 to 14 per cent to its $100 par value, Cantor Fitzgerald noted. The security carries a variable annual dividend of 12 per cent, adjusted monthly, making it attractive to income-focused investors even at its reduced price.

The problem, as Cantor Fitzgerald frames it, is structural: Strategy cannot sell new preferred shares at $100 when the market is pricing existing stock in the mid-$80s. Until that gap closes, the company’s ability to raise fresh capital on favourable terms — capital historically deployed to buy more Bitcoin — remains impaired.

Bitcoin sold to sustain dividend payments

The strain has already prompted Strategy to sell Bitcoin from its treasury. The company reportedly disposed of $216 million worth of Bitcoin in at least one instance specifically to keep STRC dividend payments flowing, according to the report.

That marks a departure from Strategy’s established playbook, under which preferred stock issuance funds Bitcoin purchases rather than the reverse. Cantor Fitzgerald’s analysts expect the company to build cash reserves dedicated to covering dividend obligations, and to take further measures — including additional Bitcoin sales if necessary — to push STRC back towards par.

Implications for shareholders and the wider thesis

For holders of STRC, the current setup offers a 12 per cent dividend yield alongside the prospect of roughly 15 per cent capital appreciation should the security recover to par. Cantor Fitzgerald’s alternative recommendation, MSTR common shares, rests on the premise that once STRC returns to par, Strategy’s broader financing apparatus resumes normal function, supporting renewed Bitcoin purchasing.

The episode nonetheless complicates the long-standing rationale for MSTR’s premium over the net asset value of its Bitcoin holdings, which has traditionally been justified by the company’s capacity to raise capital and expand its position. Should STRC remain below par, Cantor Fitzgerald cautions that further Bitcoin liquidations to fund dividends should be expected — a scenario that would undercut the narrative of Bitcoin as a purely one-way accumulation asset on Strategy’s balance sheet.

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