Strategy’s Series A perpetual preferred stock has crashed to record lows, trading between $73 and $78—a roughly 25% decline from its $100 par value over the past two weeks. The slide accelerated even as the company's Bitcoin-heavy balance sheet remained intact, with shares of Strategy's common stock (MSTR) hitting a 16-month low during the same period.
The selloff stems from a leverage cascade, as the firm has been issuing STRC and similar preferred securities over the past year to raise capital for additional Bitcoin purchases. With Bitcoin prices under pressure, the market has repriced the risk of these instruments, triggering forced selling and a feedback loop that has dragged STRC far below par.
Market reaction has been sharp across related assets. MSTR shares have fallen to levels not seen in 16 months, and the broader crypto-correlated equity space has felt the pinch. The perpetual preferred stock's yield has spiked, reflecting heightened anxiety about leverage in the crypto ecosystem. Analysts are closely watching Strategy's ability to manage its debt stack without triggering further margin calls.
Despite the carnage in its equity-linked securities, Strategy's core Bitcoin holdings remain untouched. The firm has not disclosed any plans to unwind its digital asset positions. However, the persistent discount on STRC suggests that investors are demanding a higher risk premium, and a recovery may depend on Bitcoin stabilizing or the company shifting its capital-raising strategy.