Strategy’s STRC preferred stock has failed to return to its $100 stated value, closing at $95.31 despite Bitcoin’s recent rise to about $77,125. Multicoin Capital co-founder Tushar Jain says the security’s 12% dividend does not sufficiently compensate investors for the risk of another major fall.
In an Aug. 22 X thread, Jain argued that STRC had not recovered to its stated value because the dividend remained too low compared with the losses investors had already experienced.
Strategy has presented STRC as a fixed-income investment, but Jain said the security had suffered a drawdown of roughly 30%. In his view, investors prepared to accept that level of downside risk would demand a substantially higher yield.
According to Strategy’s website, STRC finished at $95.31 on 21 August, or 4.69% below its $100 stated amount. The price has recovered significantly from its June low of $71.25, but remains below the level the company wants it to maintain.
Bitcoin was trading close to $77,125 on 22 August after reaching an intraday high of $78,763. That move took the cryptocurrency above Strategy’s average acquisition price of $75,385, returning the company’s Bitcoin treasury to an unrealised profit at prevailing market prices.
Strategy pays an annualised dividend of 12% on STRC’s $100 stated value. The distribution is divided into two monthly payments of $0.50 per share. At the stock’s 21 August closing price, the $12 annual payment represented an effective yield of about 12.6%.
Crypto.news reported on 2 August that the dividend rate had remained unchanged after STRC ended July at $89.46. The preferred stock spent much of that month below $100, even after Strategy raised the annualised rate from 11.5% to 12% for record dates beginning in July.
Strategy’s dividend-setting policy allows management to assess several factors, including STRC’s market price, competing yields, credit spreads, Bitcoin’s price and volatility, reserve coverage, capital-market conditions and the company’s overall capital structure. Dividend payments require board approval and are not guaranteed.
Previously, the company used a more mechanical approach under which a monthly volume-weighted average price below $95 could result in a recommendation to increase the dividend by at least 50 basis points. Strategy changed that policy in June, removing the automatic link between a below-par price and a higher rate.
On 27 July, Strategy said management would recommend keeping the dividend at 12% until STRC traded consistently near $100. The company also said it would not issue further STRC shares below their stated amount. That decision limits the preferred stock’s ability to raise new capital while it is trading at a discount.
Jain said increasing the dividend would create an additional challenge for Strategy because a larger payment would raise its recurring cash requirements.
Strategy launched STRC in July 2025 through an initial public offering of more than 28 million shares priced at $90 each. The security initially carried an annualised dividend of 9%, which Strategy increased several times as its market price fell below the $100 stated value.
STRC ranks above MSTR common stock in Strategy’s capital structure but below the company’s debt. It is perpetual, has no fixed maturity date and does not give investors a contractual right to demand redemption at $100.
The variable dividend was designed to encourage STRC to trade close to its stated value. If the security trades at or above $100, Strategy can sell more shares without issuing them at a discount and may use the proceeds for purposes including Bitcoin purchases.
In July, chief executive Phong Le linked the two activities, saying Strategy would issue more STRC and buy more Bitcoin once the preferred stock had returned to par. That condition makes STRC’s market price important to the company’s ability to expand its Bitcoin holdings through preferred-share sales.
Jain argued that if STRC does not regain $100, Strategy will be unable to buy more Bitcoin through accretive STRC issuance. He also said MSTR could trade at a discount similar to a closed-end fund if the company stopped making accretive Bitcoin purchases.
Strategy defines an accretive STRC issue as one that increases the amount of Bitcoin, or net Bitcoin, attributed to each assumed diluted MSTR share. However, the company says its Bitcoin-per-share measures are not indicators of shareholder returns, liquidity or conventional investment yield.
Instead of raising the dividend again in August, Strategy bought back STRC shares below $100. It repurchased 288,930 shares for about $25m during the week ending 26 July, paying an average of $86.53 per share.
The company then sold part of its Bitcoin reserve. Between 27 July and 2 August, Strategy sold 1,638 BTC for $104.7m. It allocated $52.4m to preferred-stock dividends and $52.3m to STRC repurchases.
In the following week, Strategy sold a further 1,690 BTC for $108.6m and used the entire net proceeds to buy about 1.15 million STRC shares. An 10 August report on the transaction said the average purchase price was approximately $94.29 per share.
Strategy subsequently raised $333.7m by selling 3.46 million MSTR shares between 10 and 16 August. Its filing with the US Securities and Exchange Commission showed that $132.2m was used to repurchase about 1.39 million STRC shares, while $52.4m funded STRC dividends and $149.1m was added to the company’s US dollar reserve.
Those transactions increased the reserve to about $4.80bn, while Strategy’s Bitcoin holdings remained unchanged at 840,447 BTC for the week. The coins had been acquired for approximately $63.36bn, including fees, at an average price of $75,385.
In the final post of his thread, Jain said the MSTR-to-Bitcoin chart had “fully retraced” and argued that the digital-asset treasury trade had reached its end. His comments were an opinion on Strategy’s valuation, rather than company guidance or a confirmed market result.
MSTR closed at $119.25 on 21 August after rising 6.05% during the session. Strategy’s website placed its modified net asset value ratio at about 1.00. The company cautions that its mNAV measure is not the same as net asset value under traditional accounting standards and may not forecast the price of its securities.
Both STRC and MSTR trade on Nasdaq, making the issue relevant to US investors seeking Bitcoin-related exposure through listed Strategy securities. STRC holders receive cash distributions but do not own a direct claim on a fixed amount of Bitcoin. MSTR investors remain exposed to Strategy’s operating costs, preferred-stock obligations, debt and possible share dilution.
Strategy’s 17 August Form 8-K reported no Bitcoin purchases or sales between 10 and 16 August. The filing left the company’s holdings at 840,447 BTC after two consecutive weeks of sales and disclosed US dollar reserves of $4.80bn.
