A mix of debt repurchases, declining cash reserves, and a weakening bitcoin market set off a chain reaction that pushed STRC below its $100 par target—raising broader concerns among investors.

STRC, the dividend-paying preferred equity issued by bitcoin treasury firm Strategy (MSTR), is designed to trade at par. In reality, maintaining that level has proven difficult.

On Thursday, the stock dropped below $83—about 17% under par and its lowest level since launching in July 2025. The security was intended to combine high yield with low volatility.

Holding near $100 is critical for Strategy, as it enables efficient capital raising through at-the-market (ATM) offerings used to fund its 11.5% annual dividend.

In recent weeks, however, falling bitcoin prices and a series of company actions have pushed STRC well below target. Here’s how the decline unfolded:

May 14: STRC closed at $100 ahead of its ex-dividend date while bitcoin traded above $80,000. Beneath the surface, bitcoin had already fallen from its $126,000 peak, and STRC had only briefly held par. At the same time, Strive Asset Management introduced a competing product offering a higher 13% yield with daily payouts, increasing pressure on Strategy.

May 15: Strategy announced a $1.5 billion buyback of its 2029 convertible notes at an 8% discount. The move was partly funded by a cash reserve originally meant to support dividends and debt obligations, though this was not disclosed initially. Bitcoin slipped to $78,000.

May 18: The company purchased 24,869 BTC as bitcoin continued to weaken toward $76,000.

May 26: Strategy confirmed it had used its cash reserve for the buyback, reducing the fund to $871 million—about six months of dividend coverage, down from a prior 24-month target. STRC traded just below par as bitcoin hovered near $77,000.

June 1: Strategy sold 32 BTC—its first sale since 2022—signaling it could liquidate assets if needed. Despite the small size, the move unsettled markets: MSTR shares fell nearly 6%, and bitcoin dropped to around $71,000. STRC closed at $98.07.

June 5: Bitcoin fell below $60,000 for the first time since October 2024, ending near $61,000. STRC declined sharply, briefly touching $90 before closing at $93.40.

June 8: Shareholders approved a shift to semi-monthly dividend payments. Strategy also bought 1,550 BTC and reported its reserve had recovered to $1 billion.

June 15: Another purchase of 1,587 BTC lifted the reserve to $1.1 billion.

June 18: STRC briefly dipped below $83 before closing at $88.59 ahead of a holiday-shortened week. Bitcoin fell again to around $62,880, with some attributing the move to leverage-driven liquidations rather than weakening fundamentals.

Strategy now holds 846,842 BTC at an average cost of $75,656, leaving it with an unrealized loss of roughly $11 billion at current prices.

Meanwhile, recent capital raises have drawn criticism for being dilutive, with MSTR shares down about 80% from their November 2024 peak.

All of this has unfolded during a bitcoin bear market, amplifying pressure on both the asset and the financial structures tied to it.

The key question now is whether STRC can stabilize and return to its $100 par value.