Bloomberg's Eric Balchunas says pull the plug. The real damage isn't the discount, it's what happens to the funding engine while the ATM is offline.
Key takeaways
Bloomberg Senior ETF Analyst Eric Balchunas posted on X Thursday calling on Strategy to abandon its STRC preferred stock instrument after the asset closed around $88.59 on June 18, roughly 11% below its $100 par value and off an all-time low of $82.53 hit earlier that session. "I would retire it and move on," Balchunas wrote. "Just feels like an ongoing thorn in the side of the co and broader community. They were doing fine w out it."
That's TradFi instinct dressed as advice. The actual question is whether Strategy can service its preferred obligations without selling meaningful bitcoin.
STRC is Strategy's Variable Rate Series A Perpetual Preferred Stock (NASDAQ: STRC), issued at $100 par with an 11.50% stated annualized dividend rate that adjusts monthly. As the price has fallen below par, the effective market yield has drifted to approximately 12.9%.
The depeg is not just an aesthetic problem. Strategy's STRC ATM program only allows new share issuance at or above par. Below $100, selling new shares is economically irrational, so the tap is off. That means no net new BTC purchases via that specific channel until the price recovers.
Strategy's most recent 8-K confirms the company held $1.1B in USD Reserve and 846,842 BTC as of June 14, providing significant runway through other channels, including common stock ATM capacity. But STRC at par was the efficient, lower-dilution vehicle.
Strategy also carries four other preferred series alongside STRC, with combined annual dividend obligations in the range of $750M to $800M. That is a real number that requires active management.
In late May, Strategy sold 32 BTC for approximately $2.5M (roughly $77,135 per coin) to fund STRC dividends, per a June 1, 2026 8-K filing. That was the first net bitcoin disposal since accumulation began. The prior December 2022 sale by MacroStrategy was a tax-loss harvest immediately offset by repurchase. This one wasn't.
32 BTC against 846,842 BTC held is 0.004% of treasury. The signal matters. The scale does not, yet.
Strategy's own math supports the structure holding. Its BTC reserve is valued near $55B, which covers approximately $1.7B in annual obligations for roughly 32 years at current BTC prices. BTC needs only about 3.1% annual price growth for the structure to break even.
Balchunas isn't running that stress test. The bitcoin treasury playbook these companies are operating from was never designed for TradFi comfort.
The market anxiety here is understandable. If investors believe Strategy will sell BTC to service preferred dividends, BTC dips, MSTR equity weakens, preferred holders get nervous, STRC stays below par, and the ATM stays closed. That loop is real.
But it inverts just as fast. A BTC rally restores MSTR equity, preferred confidence returns, STRC recovers to par, the ATM reopens, and Strategy buys more bitcoin. That dynamic is part of why bitcoin's power curve increasingly pulls institutional capital in ways that create these feedback structures in the first place. The Saylor 300T playbook was always going to create instruments TradFi analysts find uncomfortable.
Balchunas's "retire it" call is the conventional move. Avoid the optics, simplify the cap table, keep legacy investors comfortable. That is exactly the frame you apply if you don't believe in the underlying asset. If you do believe BTC compounds at north of 3.1% annually, STRC at par is one of the more efficient vehicles ever designed for capturing that upside with preferred investor capital. Retiring it concedes the TradFi critics' premise.
Two major analysts, Benchmark and TD Cowen, have both rebutted the death-spiral framing publicly. The structure holds if the bond market doesn't crater BTC simultaneously with a USD Reserve drawdown faster than common stock ATM proceeds can replenish it.
The thesis that this is a temporary liquidity crunch and not structural failure breaks if Strategy discloses additional BTC sales exceeding a token amount (call it north of 1,000 BTC in a single quarter) in its next 8-K, or if STRC remains below $90 through the June 30 ex-dividend date and forces a permanent shutdown of the ATM channel.
If STRC recovers to par by June 30, the dip was yield-normalization noise. Watch the next 8-K disclosure and the June 30 closing price. Those are the only two data points that matter right now.
Strategy switched STRC dividends from monthly to semi-monthly recently, which tightens the operational cadence. That's a detail worth tracking as the institutional conviction narrative gets stress-tested in real time.
STRC's ATM program only allows Strategy to issue new shares at or above par value. Below $100, issuing new shares would be economically irrational and dilutive, so the funding tap closes automatically. Strategy can still deploy capital through its common stock ATM program and its $1.1B USD Reserve, but STRC at par was the lower-dilution, higher-efficiency channel.
The June 1 8-K confirms the first net BTC disposal since accumulation began. The December 2022 MacroStrategy sale was paired with an immediate repurchase and was net positive; this one was not. The commitment is broken in letter. Whether it breaks in scale depends entirely on what the next 8-K discloses. Thirty-two coins against 846,842 held is a precedent, not a liquidation event.
The spiral scenario requires three things happening simultaneously: sustained BTC price weakness, Strategy's USD Reserve draining faster than common stock ATM sales can replenish it, and preferred dividend obligations accelerating beyond what cash flow covers. Strategy's $55B BTC reserve covers roughly 32 years of $1.7B annual obligations at current prices. That isn't a fragile structure. It becomes fragile only if BTC drops significantly and stays there for an extended period while Strategy's other funding channels are also impaired.
