MicroStrategy's STRC preferred stock has fallen below $95 for the first time in three months, creating a critical funding crisis for the company's Bitcoin accumulation strategy. The 11.50% annual dividend-paying preferred stock has traditionally served as the main engine for Bitcoin purchases, allowing the company to issue new shares at par value and convert cash into Bitcoin. However, no new STRC shares were issued during the latest reporting period, with the stock trading below par value cutting off the company's cheapest route to fresh Bitcoin purchases. As one analyst noted, 'Below $100, STRC can't fund new BTC purchases. MSTR is also depressed. That leaves one option to cover $1.7B/year in obligations: Sell Bitcoin.'
MicroStrategy sold 32 Bitcoin between May 26-31 at an average net price of $77,135 per coin, totaling $2.5 million according to the latest securities filing. This marks the company's first Bitcoin sales since December 2022, representing a significant shift in its accumulation strategy amid current market volatility. The company also sold 801,994 MSTR shares in the same week, raising approximately $128 million in net proceeds to help fund dividends. Despite maintaining the ₹6,00,000 per Bitcoin average purchase price and holding over 4% of the circulating Bitcoin supply, the company is now leaning on common stock and reserves instead of issuing STRC at par to cover its obligations. As reported by Strategy's Q1 earnings call, founder Michael Saylor had previously stated the company would 'probably sell some BTC to fund a dividend just to inoculate the market.'
As reported by BitcoinEthereumNews.com, Strategy's Bitcoin holdings are currently valued at approximately ₹5,10,000 crore ($62.24 billion) as of press time. The company held more than 843,706 BTC before the recent sale, according to the latest filing, and maintains an average purchase price of ₹6,00,000 per Bitcoin ($75,701), resulting in an unrealized loss of about ₹13,000 crore ($1.63 billion). Despite this position being roughly 2.55% below its average purchase price, the firm continues its aggressive accumulation strategy, having recently added 24,869 BTC on May 24 for $2.01 billion, marking its second-largest purchase this year. However, Bitcoin traded near $62,000 on June 3, below MicroStrategy's average purchase price of $75,702, adding pressure to the company's underwater treasury position.
According to BitcoinEthereumNews.com data, MSTR's stock price has declined significantly, reflecting investor concerns about the company's funding challenges. The stock performance reflects growing skepticism about MicroStrategy's ability to maintain its Bitcoin accumulation strategy without the preferred stock engine. STRC shares are trading as much as 5.3% below par value at one point, with the stock remaining about 4% below its earlier trading range. The company maintains a $900 million cash reserve for dividends and interest, providing some cushion for near-term obligations, but the strain is evident in the shift away from preferred stock funding to common stock sales and Bitcoin liquidations. Bitcoin fell by 4.4% over 24 hours following the sale, while Strategy's common stock has declined 15% over the past week, adding pressure on the company's market position. The current market conditions, including Bitcoin at $62,000 and over $1.66 billion in crypto liquidations, have amplified concerns about the company's capital structure.
Despite the current crisis, MicroStrategy has maintained confidence in its preferred stock model by raising the STRC dividend earlier this year to defend the peg and keeping billions in STRC capacity open for later sales. The company launched STRC in July 2025 with a 9% rate, then raised the payout seven times as the preferred stock continued to trade below its $100 reference price. The company maintains the 11.50% rate for June and signaled confidence the model recovers once Bitcoin firms up. However, critics see a turning point worth a real selling debate, with one analyst stating 'The STRC party is over ... It wont peg to $100 and therefore Saylor wont be able to use it to raise. It may not peg for a while... This is one of the reasons Bitcoin is dumping.' The coming weeks will test whether the preferred engine restarts or MicroStrategy continues reaching for other funding sources, potentially impacting both its Bitcoin accumulation strategy and overall market confidence in the company's approach.
