STRC plunge strains Saylor’s Bitcoin-linked dividend plan

MicroStrategy’s perpetual preferred stock STRC dropped to an intraday low of $82.61 on June 18, trading about 17% below its $100 stated amount, before recovering to $88.59 later that day. The lower prices imply a market yield notably above the security’s 11.5% stated annual coupon.

The coupon is payable semi-monthly and the issuer adjusts the rate monthly. At $88.59, the 11.5% coupon corresponds to an effective yield near the low- to mid-teens. MicroStrategy’s common shares (MSTR) fell about 3.4% to $112.53 on June 18, while Bitcoin traded near $62,730, down about 2.5% that day.

Roughly $10.5 billion of STRC notional remains outstanding. At the stated 11.5% rate, annual STRC-only dividend obligations equal about $1.21 billion. If MicroStrategy raised the dividend to 14% to chase par, annual cash payouts on STRC would rise to roughly $1.47 billion.

Critics have highlighted the gap between the stated coupon and the market-implied yield. MicroStrategy’s prospectus describes STRC as perpetual preferred equity and cautions that increasing the dividend when STRC trades below par may not restore the price. Tyler Wellener, chief strategy officer at Tyr Capital, described the structure as a confidence-dependent instrument that is not collateralized by Bitcoin.

Market participants pointed to on-chain STRC derivatives and tokenized share products that had been buying and tokenizing STRC while larger traders built substantial short positions. Ryan Haczynski, head of protocol partnerships at GlobalStake, noted that months of near-par trading encouraged leveraged carry strategies; when the price fell below key levels, margin calls and forced liquidations amplified the decline. Haczynski also referenced public comments in which Michael Saylor mentioned ChatGPT’s role in aspects of the STRC design, saying circulation of that clip coincided with selling pressure.

MicroStrategy disclosed a small public sale of Bitcoin between May 26 and May 31: 32 BTC sold for about $2.5 million, with proceeds earmarked to fund preferred distributions. The company reported a subsequent purchase of 1,550 BTC for $101.3 million, leaving total holdings of 845,256 BTC as of June 7 and a reported US dollar reserve of $1 billion. The 32 BTC sale is far smaller than one year of STRC-only dividends under current rates.

Options available to MicroStrategy carry trade-offs. Raising the STRC dividend could reduce the gap between the stated coupon and market yield but would increase cash outflows. Issuing additional MSTR shares would raise cash without selling Bitcoin but dilute existing equity and reduce Bitcoin-per-share accretion. Opportunistic buybacks of discounted STRC shares would signal support and could be accretive, but would use cash that might otherwise fund dividends or Bitcoin purchases. Allowing STRC to trade at wider discounts would reclassify the security in the market as higher-yield, Bitcoin-linked preferred credit.

Wellener suggested a longer-term approach would require convincing investors that MicroStrategy can increase Bitcoin per share without repeated equity issuance or constant access to capital markets. He and others pointed to derivatives strategies as a potential source of yield that would not depend on new capital or Bitcoin price appreciation.

Market participants say STRC could recover toward $95–$100 if MicroStrategy announces meaningful buybacks, boosts dollar reserves, or outlines a credible derivatives-based yield plan. If prices settle below $90 and the market adopts a higher yield baseline, STRC may trade as a high-yield, Bitcoin-linked credit product with different investor expectations.