Strategy's stock tumbled to a four-month low on Friday as the Tysons Corner, Virginia-based Bitcoin-buying firm faced pressure from crypto market conditions. The company's shares dropped as low as $114, the lowest level since early February, while Bitcoin fell below $60,000 to $59,227. The decline followed Strategy's disclosure this week that it sold 32 Bitcoin for $2.5 million, marking the firm's first Bitcoin sale since 2022—a move the company described as an attempt to "inoculate" the market to the possibility of paring holdings to pay dividends on its preferred stock.
Strategy Stock Drops to $114 as Bitcoin Falls Below $60,000
Strategy's stock price dropped as low as $114 on Friday, hitting its lowest level since early February, according to Yahoo Finance. The stock rebounded to $120 to finish the trading day, still down nearly 7%.
Bitcoin plunged as low as $59,227, CoinGecko data showed—the lowest price seen since 2024. The digital asset has risen back to $60,311, down about 5% in the last 24 hours.
The company led by co-founder and Executive Chairman Michael Saylor faced scrutiny this week after selling Bitcoin for the first time since 2022.
STRC Preferred Stock Declines 3.6% to $93
The company's preferred stock product known as Stretch (STRC) dropped 3.6% to $93 on Friday, pulling further away from the $100 par value that STRC is designed to trade at. STRC currently offers an 11.5% annual dividend paid monthly.
STRC has fallen as low as $90.38 since the company established it as an alternative way to raise proceeds to buy Bitcoin last July. Since STRC's $2.5 billion IPO, the preferred stock has ballooned to a market cap of $9.55 billion, alongside its recurring costs.
Strategy has signaled that when STRC trades above its $100 par value, it will issue more of the preferred stock and buy more Bitcoin. When it trades below the threshold, the firm has indicated that it can increase STRC's dividend in an attempt to bolster demand.
Benchmark-StoneX Analyst Assesses STRC Pullback
Benchmark-StoneX analyst Mark Palmer told Decrypt on Wednesday that the pullback "isn't a real concern for Strategy."
"The pullback in STRC is well within the range we'd expect," Palmer added. "We saw the same thing last month, when STRC dipped to about $97 and then rebounded toward $99 within days."
Palmer noted that the product's dividend has remained unchanged over the past four months. "Its monthly rate-reset mechanism exists precisely to pull the price back to par," Palmer added.
Other analysts have described Strategy's liquidation, totaling 32 Bitcoin for $2.5 million, as negligible given that the company's stockpile is worth $50.4 billion. However, the move contrasted with the buy-and-never-sell mantra that Saylor had long promoted.
Strategy Holdings Valued $13.7 Billion Below Purchase Cost
When Strategy disclosed its Bitcoin sale on Monday, the company said that it had spent $63.9 billion on the digital asset since transforming itself years ago. The company's holdings were $13.7 billion underwater on Friday.
As the company's holdings came under pressure last year, Strategy earmarked $2.25 billion to ensure that it could continue to make distributions on STRC. The company took a 61% chunk out of those reserves when repurchasing debt last month.
FAQ
What did Strategy disclose about Bitcoin sales this week?
Strategy disclosed on Monday that it sold 32 Bitcoin for $2.5 million this week, marking the company's first Bitcoin sale since 2022. The company described the move as an attempt to "inoculate" the market to the idea that Strategy could pare its holdings to pay dividends on its flagship preferred stock STRC.
Why did Strategy's STRC preferred stock decline on Friday?
STRC dropped 3.6% to $93 on Friday, pulling further away from its $100 par value. The preferred stock, which offers an 11.5% annual dividend paid monthly, has faced pressure alongside the broader decline in Strategy's common stock and Bitcoin's fall below $60,000. Benchmark-StoneX analyst Mark Palmer stated the pullback "isn't a real concern" and noted that Strategy can increase STRC's dividend to bolster demand when it trades below the $100 threshold.
How much are Strategy's Bitcoin holdings currently worth?
Strategy's Bitcoin stockpile is worth $50.4 billion. The company disclosed on Monday that it had spent $63.9 billion on the digital asset since transforming itself years ago, meaning the holdings were $13.7 billion underwater on Friday.
