Strategy’s STRC Drawdown Continues Despite $300 Million Cash Boost. What Gives?

The new centerpiece of Michael Saylor’s Bitcoin accumulation engine is failing to perform as intended.

Strategy‘s STRC preferred stock has not traded near its $100 par value since the end of last month. It closed at $88.79 on Monday, after bouncing off a new record low of $82.53 reached last Thursday.

STRC’s bad spell did not break as it approached its now past ex-dividend date of June 15. Bitcoin’s rebound to $67,000 last week surprisingly did not help, nor has Strategy announcing on Monday that it now has $1.4 billion in cash reserves after adding $300 million last week. It has also not helped that the company has shifted to a bi-monthly dividend payment structure. 

So, what gives?

The theories making the rounds include shorting of STRC, a rotation to Strive‘s SATA preferred stock and an unraveling of leverage. Though the real reason is likely less dramatic, the question now becomes what Strategy is likely to do — and what the chances are that it can turn around its struggling empire.

In the rest of this issue, subscribers get:

• An in-depth look at all the theories thought to be driving STRC’s decline: from the likelihood of a short seller depressing the price to the possibility of a SATA rotation, to the hypothesis that liquidations are causing the slump.
• Why rumors of Strategy’s death may be greatly exaggerated: What “death spiral” prognosticators are missing.
• A look at how Strategy could handle the situation and the potential outcomes: why Strategy still has several tools at its disposal to bring STRC to par.
• The two main numbers to watch for STRC’s recovery.

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