Strategy’s $10.5B STRC Falls, Yield Nears 12.6%

Strategy’s $10.5 billion STRC preferred stock closed at $91.79 on Tuesday, its third-lowest settlement since the issue began trading in July 2025. At that price the $11.50 annual dividend implies a yield around 12.6%.

STRC is a variable-rate perpetual preferred with a stated amount of $100. Strategy issues shares through an at-the-market program and expanded the outstanding amount from $2.8 billion to $10.5 billion over the past year, adding about $7.7 billion. The company can change the dividend rate to influence trading near $100, but there is no automatic mechanism that forces the market to value the security at par.

Market participants have demanded higher yields as Bitcoin’s price has declined. Kraken’s chief economist Thomas Perfumo estimated that roughly 86% of the variation in STRC’s yield spread is explained by moves in Bitcoin, indicating a close link between STRC’s pricing and the cryptocurrency’s swings. Other Strategy preferred issues, including tickers STRK, STRD and STRF, have also shown pressure.

A competing bitcoin-backed preferred, SATA, has traded closer to its $100 stated amount while offering an annualized payout near 13% and distributing dividends daily. Daily payments reduce the buildup around ex-dividend dates and raise the carrying cost for short sellers. DeFi Development Corp.’s chief operating officer and chief investment officer, Parker White, estimated the baseline borrowing cost for SATA at about 460 basis points and calculated the effective annual cost to short SATA, after daily dividend obligations, at about 17.6%.

By contrast, White estimated the outright borrowing cost for STRC at roughly 60 basis points, which makes short positions cheaper to maintain. He also noted that ongoing at-the-market issuance can increase supply when shares trade above $100, which may limit upside and reduce risk for traders betting against the stock.

Bitwise Europe’s head of research, Andre Dragosh, estimated that raising the dividend by slightly more than $1 would be required to pull STRC back toward par, placing an equilibrium dividend in the low-12% range. Any increase in the dividend would raise Strategy’s recurring cash obligations.

White outlined several corporate options that could affect STRC’s market behavior: increasing the dividend, switching to daily dividend payments pending shareholder approval, raising the call price above $101, and rebuilding cash reserves. He suggested a cash buffer near $2.5 billion to improve coverage of dividend payments, while noting such steps would alter the company’s cash commitments and could affect capital available for Bitcoin purchases.

STRC’s investor base appears to include a large share of Bitcoin-native holders who may rotate into spot Bitcoin when prices fall. Attracting a broader set of fixed-income or money-market investors would likely require stronger evidence that STRC can maintain a trading range during cryptocurrency drawdowns.