NEW YORK, June 26, 2026, 10:05 (EDT) — Strategy Inc. (NASDAQ:MSTR) shares edged lower in early Friday trading, but a far more telling signal for equity holders came from the company's preferred stock, not its common shares. The sharp decline in the Variable Rate Series A Perpetual Stretch preferred stock (NASDAQ:STRC) highlights growing strain on the company's capital-raising model as bitcoin prices lag well below its average acquisition cost.
MSTR was last at $84.82, down 0.6%, giving Strategy a market capitalization of roughly $28.3 billion. Meanwhile, STRC fell 2.7% to $73.68, a 26% discount to its $100 stated amount. This gap matters because STRC is one of Strategy's primary tools for accessing capital markets to fund bitcoin purchases and meet cash needs. The 11.5% stated dividend now translates into an effective yield of approximately 15.6% for investors buying at the current market price, reflecting heightened risk perception.
Unrealized Losses and Bitcoin Holdings
At the latest bitcoin price of $59,871, Strategy's reported hoard of 847,363 BTC was worth about $50.7 billion, roughly $13.4 billion below its total purchase cost of $64.10 billion. The average purchase price stands at $75,651, meaning bitcoin is currently trading about 21% below that level. This paper loss has eroded confidence in the company's ability to continue its aggressive bitcoin accumulation strategy.
Funding Strain Evident in Preferred Stock
Strategy's March STRC annex allowed for up to $21 billion in STRC sales through at-the-market offerings, with a stated plan to issue additional shares at $99 to $101 per share. However, with STRC trading near $74, that channel has become far less viable. A June 22 filing revealed that Strategy sold 2.7 million common shares in the week ending June 21, raising $335.5 million, but used only $34.9 million to purchase 520 bitcoin — just over 10 cents of each dollar raised. The company's bitcoin holdings stood at 847,363 BTC, and its cash reserves were $1.4 billion.
The common stock's market value is now equal to about 56% of the gross bitcoin value, but that metric is not a clean asset-value signal. Strategy's own filings caution that common shareholders do not have a direct claim on its bitcoin and that debt and preferred claims rank ahead of common equity.
Correlation with Bitcoin and Investor Sentiment
STRC's 90-day correlation with bitcoin has climbed to nearly 0.70, the highest since the preferred stock began trading in July 2025, according to CoinDesk. This undermines the preferred stock's original pitch as a steadier income product tied to Strategy's bitcoin balance sheet. Earlier this month, Chief Executive Phong Le stated that paying STRC dividends twice a month was intended to “stabilize price.” Stockholders approved the semi-monthly dividend schedule at Strategy's June 8 annual meeting.
Strategy's website notes that STRC pays an 11.50% annual dividend, payable semi-monthly in cash, but also warns that the cash dividend is not guaranteed and the rate may change. Alexander Blume, CEO of Two Prime, told CoinDesk that the issue is one of confidence. “Markets are about trust,” he said, adding that weak performance in both MSTR and STRC has hurt retail investor confidence in the structure.
Market Context and Outlook
Fundstrat's digital asset strategy head Sean Farrell said he was “hesitant to aggressively buy the dip” in bitcoin following the latest selloff. This caution matters for Strategy because both its common and preferred stock depend on continued access to capital markets. A June 23 prospectus supplement reported STRC's last Nasdaq sale price at $87.31 and detailed the shift to two dividend payments per month. By Friday morning, STRC was about 16% below that level. The next key date is June 30, when the last monthly STRC payment date and the first semi-monthly record date coincide.
The preferred stock's decline underscores the challenges Strategy faces as it relies on equity-linked instruments to fund its bitcoin strategy amid a prolonged crypto downturn. With bitcoin trading well below its average purchase price and STRC's discount widening, the company's capital-raising model is under intense scrutiny.
