Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock dropped sharply last week, trading near $75 after hitting a record low around $71. The decline erased the company's long-standing premium over its Bitcoin holdings and raised questions about its financing model. Bitcoin traded below $60,000 as Strategy common shares hit a two-year low near $82.
The selloff centered on STRC, which is designed to trade near its $100 stated value. At current levels the effective yield has risen to about 15 percent. enterprise market-to-net asset value slipped below 1 for the first time, showing investors are no longer paying extra for the structure built around the company's Bitcoin treasury.
Market participants estimate Strategy faces roughly $8 billion in potential cash demands over the next two years from preferred dividends and convertible notes that could be put back to the company. The firm holds about $1.4 billion in cash reserves. Options traders have shown interest in bearish positions with strikes at $60.
Ripple Chief Executive Officer Brad Garlinghouse said in a Friday CNBC interview that the preferred-stock model amounts to financial engineering that has hurt the broader crypto market. He added that long-term value comes from utility rather than capital-structure tactics, though he remains bullish on Bitcoin. Michael Saylor responded that volatility tests every capital structure and that Strategy stays focused on Bitcoin and disciplined capital allocation.
