Strategy's STRC preferred stock hits a record low below par

Strategy's Series A preferred stock (STRC) fell below its $25 par value to a record low of $24.75 on May 15, 2024. This decline has halted Strategy's ability to sell these preferred shares above par, a funding mechanism previously used to acquire Bitcoin. The STRC stock's dividend obligations were also the catalyst for Strategy's first-ever Bitcoin sale in May 2024, when the company sold 100 BTC to cover a $1.5 million dividend payment. The company stated that the sale was a "proactive measure" to ensure it could meet its financial obligations. Strategy's business model relies on using preferred stock sales to purchase Bitcoin, which it then holds as a long-term investment. The recent drop in STRC's value below par indicates a significant decrease in investor confidence or market demand for the company's financing instrument. This event marks a critical juncture for Strategy, as its primary funding source is now impaired, and its Bitcoin holdings are being depleted to service debt.