Strategy’s preferred stock STRC, one of the key tools the company uses to keep funding its Bitcoin purchases, has fallen well below its intended $100 level this week. After slipping further to around $82.6, the stock reversed and is trading near $88.
The timing made the selloff sting more than usual. In a recent interview, Michael Saylor said he built STRC’s design entirely with AI assistance, describing long back-and-forth sessions with the tool rather than working the structure out himself.
The comment surfaced just as the stock was sliding, and it quickly became a talking point alongside the price action.
On-chain investigator ZachXBT was unsparing in his criticism. He told followers to stay away from a product advertising an 11% yield to retail, framing it as the kind of return that should raise flags rather than excitement.
When an X user defended STRC as a well-collateralized, asset-backed loan where the risk sits with Strategy and its Bitcoin-believing shareholders, ZachXBT mocked the response, dismissing the idea that past performance is irrelevant in what he sarcastically called “a new age,” and questioning why a product with supposedly endless institutional demand is being marketed to everyday retail investors instead.
Bitcoin commentator Jesse Myers offered a more technical explanation for the drop. According to his read, Strategy’s underlying finances remain solid, with enough cash flow to cover STRC dividends for decades even without Bitcoin price growth, and indefinitely if Bitcoin appreciates at just a modest pace.
His theory for the selloff centers on leverage. As STRC’s price stabilized near $99-100 over the past six months, investors increasingly used heavy leverage, in some cases up to 20x, to amplify their yield. That setup works only as long as the price holds. Once STRC weakened and attention shifted to newer offerings, Myers believes aggressive short selling may have triggered margin calls and forced liquidations, creating a cascade that pushed prices lower and accelerated additional selling.
(adsbygoogle = window.adsbygoogle || []).push({});Myers expects the market to stabilize on its own as hedge funds recognize the fundamentals haven’t changed and step in as buyers, while existing short positions get covered. He also floated the possibility that Strategy raises STRC’s dividend rate at its next scheduled adjustment, potentially pushing effective yields above 14% for buyers at current levels.
Another option he raised is Strategy directly repurchase discounted STRC shares, funded either through new MSTR issuance or traditional debt, then later reselling those shares near $100 and using the difference to buy more Bitcoin.
Related: Strategy Implements Semi-Monthly Dividend Payment Model for STRC
