MicroStrategy’s $2.5 billion perpetual preferred stock falls to $88, disrupting its Bitcoin accumulation model amid rising funding costs.
MicroStrategy’s perpetual preferred stock (STRC) has dropped to $88, its lowest level since its $2.5 billion IPO in July 2025. The stock, designed to fund Bitcoin purchases above its $100 par value, now trades 11% below that threshold, breaking the company’s funding loop. STRC pays an 11.5% annual dividend, adjusted monthly to maintain par value, but the decline forces MicroStrategy to reconsider its strategy.
The stock’s slide follows a broader downturn in digital assets and rising funding costs. Analysts note the instrument was intended to avoid common stock dilution or debt covenant breaches, but its failure to hold par value limits MicroStrategy’s ability to accumulate more Bitcoin. The company remains the largest corporate BTC holder among public firms, with holdings tied to its funding mechanisms.
Veteran portfolio manager Jeff Dorman warned that MicroStrategy faces limited options, including selling Bitcoin or common stock to stabilize STRC. The situation highlights growing pressure on the company’s leveraged Bitcoin strategy as market conditions shift.