Svmuu News: Arkham published an analysis noting that Strategy’s preferred stock, STRC, has clearly decoupled from its par value. It is currently trading at approximately $76.20, representing a discount of about 25% from its $100 par value. STRC is a perpetual preferred stock with an annualized dividend yield of approximately 11.5%. A total of approximately 104.89 million shares have been issued, corresponding to an annual dividend cost of about $1.2 billion. As of this Monday, Strategy held approximately $1.4 billion in reserve funds on its balance sheet.
Unlike the Terra (LUNA) mechanism, Strategy and its founder, Michael Saylor, do not face the structural risk of “forced liquidation.” The price of STRC reflects market expectations regarding the sustainability of future dividends rather than a forced liquidation mechanism. STRC dividend payments are not legally mandatory; therefore, if the financing environment deteriorates, the company may choose to suspend dividends, thereby avoiding a structural collapse similar to a “death spiral.”
The current decline in STRC is believed to stem primarily from market concerns regarding future financing capacity, the sustainability of dividends, and the opportunity cost of capital, rather than an immediate liquidity crisis.
Arkham noted that this mechanism does not directly threaten Strategy’s survival; however, in the long term, if high dividends rely on continuous capital market financing, it could affect the appeal of MicroStrategy’s common stock ($MSTR) to new investors.