Strategy Rebuilds Cash Reserves to $1.4 Billion, Prioritizing Credit Protection for Preferred Stock STRC Under Pressure
N.R. Finch
Strategy boosted its cash reserves to $1.4 billion for a third straight week while buying just 520 bitcoin — its smallest recent purchase — as preferred stock STRC hit a record 17% discount to par; whether reserves can cover roughly $100 million a month in dividend costs is now the central test of its business model.
Where did the money go — why so little spent on bitcoin?
Strategy raised $335 million by issuing common stock this week. Of that, $300 million went straight into cash reserves; only $35 million bought 520 bitcoin — the smallest single purchase in recent weeks.
This means → the company is deliberately prioritizing "stockpile cash" over "stockpile bitcoin." The order of operations has flipped.
In plain terms = nine out of every ten dollars raised went into an emergency cushion, not into crypto.
What happened to STRC — why did the preferred stock fall so far?
STRC — Strategy's preferred stock, promising a fixed 11.5% annual dividend — dropped to $82.53 intraday last Friday, a roughly 17% discount to its $100 par value and a record low.
This means → the market is pricing in doubt about whether Strategy can keep paying that dividend.
STRC's scale now adds roughly $100 million a month in costs. Cash reserves have fallen from $2.25 billion a few months ago to $1.4 billion — the cushion is thinning.
Founder Michael Saylor acknowledged the strain on "retirees who viewed it as a low-volatility product," saying "volatility is never easy."
What does hoarding cash cost — is the core growth metric slipping?
Strategy has long tracked "bitcoin per share" as its key measure of shareholder value. Over the past three weeks, that metric's year-to-date growth fell from 12.8% to 11.8%.
This means → rebuilding the cash reserve directly dilutes per-share bitcoin exposure — every dollar spent defending credit is a dollar not spent growing the stack.
Critic Peter Schiff called it "swapping $1.20 of bitcoin for $1.00 of bitcoin — effectively destroying value."
What about the competition — was Strive caught in the same wave?
Strive, which runs a similar "digital credit" model, saw its preferred stock SATA (annualized 13% dividend) fall to $92.88 last Friday before bouncing to $98.26 on Monday.
Strive CEO Matt Cole characterized the drop as a "forced-liquidation event," arguing that STRC selling pressure spilled into peer instruments.
This reflects a broader signal: it is not just Strategy's problem — the entire "issue stock → buy bitcoin → pay dividends to attract capital" playbook is facing its first collective stress test.
Full position snapshot — where do Strategy and Strive stand now?
Strategy holds 847,363 bitcoin. At roughly $65,000 per coin, total holdings are about $55 billion, with an unrealized loss of roughly $9 billion. Common stock rose 3.8% to $116.60 on the day but is still down about 27% over the past month.
Strive added 750 bitcoin in the same period, bringing its stack to 19,864. Common stock rose 6.3% to $15.71 but remains down about 13% over the past month.
In plain terms = both stocks bounced for a day, but the monthly drawdowns are still deep — the market offered a breather, not a vote of confidence.
Content is for reference only, not financial advice.