Michael Saylor, executive chairman of Strategy, signaled on Sunday that the company is preparing to buy more Bitcoin, posting a tracker chart of its holdings with the usual caption about adding dots. The hint comes as Strategy's STRC perpetual preferred stock faces a crisis, trading below $89 and forcing a dividend hike that adds roughly $53 million in annual costs.
STRC Turmoil and Market Impact
STRC, a variable-rate perpetual preferred stock with an 11.5% annual dividend and $100 stated value, has dropped sharply, triggering a mandatory dividend increase. Bloomberg ETF analyst Eric Balchunas called the vehicle an "ongoing thorn" and suggested Strategy abandon it. Some analysts warn that expectations of Saylor selling Bitcoin to raise cash for STRC holders could pressure BTC prices.
Questions on Funding Sources
Bitcoin purchases via STRC were reportedly paused in June. Strategy's mNAV (multiple of Net Asset Value) currently sits at 1, which, per the company's equity guidance, means it should not issue new common MSTR shares. Crypto commentator Byzantine General questioned how Saylor can still buy, noting that STRC is below $100 and issuing MSTR is off the table, calling it "incredibly reckless" if cash reserves are used.