Strategy's Bitcoin Funding Machine Faces Stress as Preferred Stock Drops Below Target

Executive Briefing

• Signals trouble: Strategy's STRC preferred stock fell to ~$82-88, well below its $100 target price, raising financing costs above 13%.
• Reveals strain: STRC's dividend rate has climbed from 9% at launch to 11.5%, with Strategy repeatedly hiking payouts to prop up the price.
• Shows pressure: Strategy's BTC Yield metric declined from 13% to 11.8% year-to-date as continued share issuance dilutes per-share bitcoin holdings.
• Draws comparisons: Critics liken the preferred stock structure to leveraged DeFi yield schemes, though supporters reject parallels to Terra's UST collapse.
• Confirms risk: Strategy remains a leveraged bitcoin bet—amplifying gains in bull markets but introducing financing and capital-market risks direct holders avoid.