Strategy’s STRC Information preferred stock is still trading below its $100 stated value, and Multicoin Capital co-founder Tushar Jain says the current 12% dividend does not pay investors enough for the risk.
- STRC closed at $95.31 on Aug. 21, still below par
- Jain says the 12% yield is too low to pull it back to $100
- Strategy has used BTC sales, MSTR sales, and buybacks to support the structure
- The real question: can this financing setup keep working without getting more expensive?
On Aug. 21, STRC traded at $95.31, leaving it 4.69% below its $100 stated amount. That is not a meltdown, but it is not what Strategy wanted from a preferred stock that was marketed with the goal of trading near par.
The awkward part is that Bitcoin itself has recovered above Strategy’s average acquisition price. BTC traded near $77, 125 on Aug. 22 after reaching an intraday high of $78, 763, while Strategy’s average purchase price sits at $75, 385. So the underlying asset is firming up, but the preferred stock tied to Strategy’s Bitcoin financing machine is still sagging. Not exactly a victory lap.
Jain did not sugarcoat it. He said STRC has not “repegged”, meaning moved back toward its $100 target price, because the dividend is too low for the risk investors are taking.
Tushar Jain: “STRC has not repegged despite this monster BTC rally because the dividend is way too low, ”
Tushar Jain: “If Saylor raises the dividend for STRC to get it to repeg, he raises his annual cash burn substantially.”
Jain: The MSTR-to-Bitcoin chart had “fully retraced”.
That is the basic trap Strategy is trying to avoid. If the dividend stays where it is, STRC may keep drifting below its stated amount. If the dividend goes up enough to pull the price back toward $100, Strategy’s cash costs rise. There is no free lunch here, just a more sophisticated way to pay for the buffet.
What STRC is supposed to do
STRC is Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock. In plain English, it is a perpetual preferred security with a variable dividend and a $100 stated value.
Strategy Announces Proposed Initial Public Offering of STRC was the launch moment for a product designed to sit in a very specific niche. It is not common stock. It is not traditional debt either. It sits above Strategy’s common stock, MSTR, in the capital structure, but below the company’s debt. That means preferred holders generally stand ahead of common shareholders if things go badly, but they do not get the same upside if things go very right.
Strategy launched STRC in July 2025 with an initial annualized dividend rate of 9%, paid monthly in cash. In July, the company raised the annualized dividend to 12%, split into two monthly payments of $0.50 per share. At the Aug. 21 market price of $95.31, that works out to an effective yield of about 12.6%.
Strategy has also said it will not issue additional STRC shares below the stated amount. On July 27, the company said management would recommend holding the rate at 12% until STRC traded near $100. That same stance shows up in the company’s own updates, including Strategy keeps STRC dividend at 12% below $90.
That is the whole pitch: keep the preferred close to par with a dividend that looks attractive enough to hold demand together. If that sounds like financial engineering with a Bitcoin garnish, well, that is because it is.
Why the $100 level matters
The stated value is the reference point Strategy wants STRC to trade around. It is not the same thing as a guaranteed redemption price, and it is certainly not a promise that the market will politely obey.
Strategy has said STRC can be redeemed at $101 plus accumulated and unpaid dividends under certain conditions. The security is also perpetual, which means there is no fixed maturity date forcing the issue the way there would be with a standard bond.
That matters because perpetual preferreds live and die by confidence. If investors think the payout is rich enough for the risk, the stock can trade near par. If they do not, it slips. The market is not sentimental about these things.
A below-par price also makes future issuance harder. Strategy has already said it would not issue more STRC below the stated amount, which is sensible. Selling more of something that is already trading at a discount is not bold finance. It is just weak demand with extra steps.
How Strategy has been propping it up
According to the figures provided, Strategy has not been standing still.
The company repurchased 288, 930 STRC shares for about $25 million during the week ending July 26, at an average price of $86.53 per share. Between July 27 and Aug. 2, Strategy sold 1, 638 BTC for $104.7 million and directed $52.4 million to preferred-stock dividends and $52.3 million to STRC repurchases.
During the following week, Strategy sold another 1, 690 BTC for $108.6 million and used the net amount to buy back about 1.15 million STRC shares. An Aug. 10 report said the company paid an average of approximately $94.29 per share in that repurchase.
Then came more support from the common stock side. From Aug. 10 through Aug. 16, Strategy sold 3.46 million MSTR shares and raised $333.7 million. Of that amount, $132.2 million funded the repurchase of about 1.39 million STRC shares, $52.4 million covered STRC dividends, and $149.1 million went into Strategy’s U.S. dollar reserve, which increased to roughly $4.80 billion.
That reserve is basically cash on hand. It gives Strategy breathing room, but it also shows how much moving parts are involved here: BTC sales, common-stock sales, dividend payments, buybacks, and reserve management all swirling around one preferred stock trying to stay above $100.
There is also a broader pattern here, including what some analysts describe as Strategy’s STRC May Be Creating Mid-Month Bitcoin Buying, as well as the occasional market whiplash when Strategy’s STRC Returns to $100 as Saylor Eyes More Bitcoin.
Why Jain’s criticism lands
Jain’s argument is straightforward. STRC is being treated like a fixed-income product, but the yield may not be high enough to justify the drawdown risk. The security is perpetual, sits above common stock but below debt, and can still trade well below its stated amount if investors do not like the compensation.
At a 12% annualized dividend, the headline yield sounds strong. But if the market still sees meaningful downside, 12% may not be enough. That is the whole problem with yield products: the number looks great right up until the price starts sliding.
Strategy can raise the dividend and perhaps pull STRC closer to par. But that would increase annual cash burn, exactly as Jain pointed out. Keep the dividend lower, and the preferred may stay discounted. Raise it too aggressively, and the cost of holding the structure together climbs fast.
There is a fair counterpoint here. Strategy may believe STRC gives it a more flexible financing tool than debt, and more appeal to income-seeking investors than common equity. If the market cooperates, the structure could still serve its purpose. The problem is that markets only cooperate when they feel like it, which is to say, not because a company has a nice PowerPoint.
Bitcoin above cost does not fix everything
Strategy holds 840, 447 BTC acquired for about $63.36 billion, including fees, with an average purchase price of $75, 385. Bitcoin moving above that level is psychologically helpful for bulls, but it does not automatically repair STRC’s pricing problem.
STRC is not a pure Bitcoin tracker. It is a financing instrument tied to Strategy’s ability to keep raising capital without the whole structure looking strained. That is why investors care about more than BTC price alone.
Strategy’s common stock also matters. MSTR closed at $119.25 on Aug. 21 after rising 6.05% during the session, and Strategy’s mNAV was near 1.00 on its website. For context, mNAV is Strategy’s modified net asset value measure, a company-specific ratio, not a standard textbook metric.
Jain’s remark that the MSTR-to-Bitcoin chart had “fully retraced” suggests he sees less of a premium buffer than before. If that premium fades, Strategy has fewer easy levers. STRC below $100 makes the preferred side harder. A weaker MSTR premium would make the common-stock side harder too.
And if the market wants another ugly example of how messy the balancing act can get, just look at Strategy Skips Bitcoin Buy, Raises $333.7M to Support STRC.
What this says about Strategy’s model
Strategy deserves credit for being unusually explicit about what it is trying to do. It has built a capital structure around Bitcoin and is using preferred stock, common stock, cash reserves, and even BTC sales to keep the machine moving.
That is bold. It is also fragile.
STRC below $100 is a reminder that financial engineering only works when the market buys the premise. If investors think the dividend is too skinny, the preferred trades weak. If Strategy boosts the dividend to fix that, the company pays more to keep the structure upright. And if support requires constant selling of BTC or MSTR, the model gets more expensive and less elegant by the week.
Bitcoin may be the reserve asset at the center of the thesis, but the financing wrappers around it still have to survive market scrutiny. No amount of corporate gloss changes that. For a deeper look at the mechanics, there is also STRC stays below $100 as Jain questions 12% yield.
Key questions and takeaways
-
Why hasn’t STRC returned to $100?
Because the market may not think the current 12% annualized dividend compensates enough for the risk. A perpetual preferred can trade below par for as long as investors stay unconvinced. -
What does “repegged” mean here?
It means STRC moved back toward its $100 stated value. Jain’s point is that the security has not done that, even with Bitcoin rallying. -
Can Strategy fix STRC by raising the dividend again?
Possibly, but that would increase annual cash burn. Higher yield can support price, but it also makes the financing more expensive. -
Why does STRC matter to Bitcoin holders?
Because it is part of Strategy’s broader Bitcoin-funded capital structure. If STRC stays weak, it could limit how efficiently the company raises capital for more BTC. -
Does BTC trading above Strategy’s average cost solve the problem?
No. It helps sentiment, but STRC’s price depends on investor appetite for the security itself, not just on where Bitcoin trades for a few sessions. -
Is this model sustainable?
Only if Strategy can keep attracting buyers without endlessly increasing dividends, selling too much Bitcoin, or leaning too hard on MSTR issuance. That balance gets harder if the preferred stays below par.
STRC Information from Strategy lays out the company’s own framing of the security, while the term itself also fits into the broader category of Preferred stock, useful for income, but never magic, no matter how many buzzwords are stapled to it.
For anyone expecting a neat, one-line answer, sorry: I'm sorry, but it seems you haven't provided any HTML. The market, as usual, refuses to be that cooperative.
Further reading
For Strategy’s own framing of the financing setup and where it goes from here:
