Strategy Common Stock Rises 6.1%, STRC Still Below Par Value

MultiCoin Capital co-founder Tushar Jain stated that despite the rise in Bitcoin prices, Strategy's perpetual preferred stock STRC has not recovered its par value. The low dividend yield is cited as a major reason, and STRC emphasized the need for yield improvement after a 30% decline. As of last Friday, Strategy's common stock was up 6.1% to $119, but STRC remained at $96.18, still below the benchmark price of $100. Strategy faces a dilemma of increased cash consumption if it raises dividends to recover STRC's par value, and there are analyses suggesting that if additional Bitcoin purchases are halted, the common stock MSTR could trade at a discounted price. In recent weeks, the company has halted Bitcoin purchases and focused on funding through stock buybacks to pay STRC dividends. By the end of July, it sold $218 million worth of Bitcoin to pay preferred stock dividends and raised $333 million by selling 3.5 million shares. STRC is still trading below $95, while Strategy's dollar reserves amount to $4.8 billion. The industry expects Strategy to continue raising dividend rates and buying back shares to recover STRC's par value.