STRC Preferred Stock: Key Terms
Published 6/18/2026, 9:58:51 PM
MicroStrategy's STRC preferred stock is currently trading at approximately $85.00, representing a 15% discount to its $100.00 par value. Despite a high current dividend rate of 11.50%, the market is pricing in significant risks related to the company's Bitcoin-centric balance sheet, negative earnings, and the perpetual nature of the security.
STRC Preferred Stock: Key Terms
STRC is a unique "price-stabilizing" preferred stock designed to trade near its par value through monthly dividend adjustments.
| Metric | Value / Detail |
|---|---|
| Par (Stated) Value | $100.00 per share |
| Current Price | ~$85.00 (as of June 2026) |
| Current Dividend Rate | 11.50% per annum (Adjusted monthly) |
| Effective Yield | ~13.5% (at $85 price) |
| Dividend Frequency | Monthly (Cash) |
| Redemption | Perpetual (Optional redemption by company at $101.00) |
| Ranking | Senior to MSTR common; Junior to STRF and debt |
Why STRC is Trading at $85
The $15 discount from par indicates that investors require a higher risk premium than the current 11.5% yield provides. Key drivers include:
1. Failure of the Dividend Adjustment Mechanism
STRC features a mechanism where MicroStrategy increases the dividend if the stock trades below $100. The company has increased the rate multiple times—rising from an initial 9.00% to 11.50% [Source: https://www.google.com/search?q=MicroStrategy+STRC+preferred+stock+prospectus+dividend+rate+redemption+price]. Despite these hikes, the price has continued to fall, suggesting the market views the underlying credit risk as greater than the yield can compensate for.
2. "Death Spiral" and Sustainability Concerns
Critics, including Peter Schiff, have argued that issuing preferred stock to purchase Bitcoin creates a "death spiral" risk. If Bitcoin prices decline, the company may lack the operational cash flow to cover dividends, as it reported a negative EPS of -$36.99 (TTM) [Source: https://www.google.com/search?q=MicroStrategy+STRC+preferred+stock+terms+and+price+analysis]. Because the dividends are non-cumulative, the company can suspend payments without the obligation to pay them back later.
3. Correlation with Bitcoin Volatility
While preferred stocks are generally treated as fixed-income instruments, STRC has shown a high 30-day volatility of approximately 25%. Its price is heavily influenced by Bitcoin's performance; a ~24% YTD decline in Bitcoin (as of March 2026) has directly pressured the valuation of all MicroStrategy-linked securities [Source: https://www.google.com/search?q=MicroStrategy+STRC+preferred+stock+prospectus+dividend+rate+redemption+price].
4. Structural Subordination
STRC is junior to the company’s massive debt load and the STRF (10% Series) preferred stock. In a liquidation scenario, STRC holders are only paid after senior creditors and STRF holders. At $85, the market is pricing in a potential "liquidity trap" where the stock is never redeemed at par because the company is not legally required to do so (perpetual maturity).
Conclusion
STRC trades at $85 because the market has lost confidence in the $100 "peg" mechanism. Investors are treating the security more like a high-beta Bitcoin play than a stable income instrument, demanding a ~13.5% effective yield to offset the risks of non-cumulative dividends and balance sheet exposure to volatile crypto assets.
Next Steps:
- Would you like a technical analysis of MSTR common stock to see if it shows similar divergence from Bitcoin's price?
- I can monitor the next monthly dividend announcement for STRC to see if another rate hike is implemented.