A viral thread from Bitcoin advocate Samson Mow argues that Strategy’s STRC preferred stock automatically self-repairs when it trades below par, but the claim sits awkwardly against both Strategy’s published rulebook and a discount that has now lasted two months.
Mow’s case: A discount that pays you to wait
Mow, the JAN3 chief executive, laid out the argument in a thread on Monday. It starts with what stops below par: Strategy halts new STRC issuance through its at-the-market program, raising no capital at a discount and adding no fresh perpetual dividend obligations. From there, in his telling, two free-market forces pull the price back toward $100, growing stronger the deeper the discount runs.
The first is effective yield. STRC’s 11.5% dividend is calculated on its $100 par value, not its market price, so a buyer paying $90 earns a 12.78% effective yield. The second is a pull-to-par capital gain: closing the gap from $90 back to $100 adds an 11.11% return on top. Mow’s sum, roughly 23.89% over a year at a $90 entry, is what he says draws total-return buyers, concluding that “STRC is working perfectly as designed.”
What Strategy’s own rulebook says
The trouble is that Strategy’s published mechanics point the other way. Under its rules-based Dividend Adjustment Framework, the company evaluates STRC’s rate each month against its volume-weighted average price: below $95, it recommends raising the dividend by 50 basis points or more; only between $99 and $101 does it anticipate no change. With STRC around $89, roughly 11% below par and its weakest since the security launched in July 2025, the framework calls for a hike, not inaction.
That cuts directly against Mow’s claim that there is nothing for Michael Saylor and Strategy to do. The instrument is explicitly engineered to be steered toward $100 by monthly dividend adjustments—a mechanism that, by the filing’s own terms, leans on raising the coupon when the price sags, the opposite of a hands-off repair.
The bear case: Cash strain and a rival pulling capital
The discount also has a harder reading. STRC has not traded at par since mid-April, dipping as low as $83 last week, and the slide has tracked a weaker Bitcoin price and growing scrutiny of Strategy’s cash reserves against its dividend obligations. Capital has flowed toward Strive’s SATA, a rival Bitcoin-treasury preferred offering a higher yield, daily dividends, and a debt-free structure, widening the gap between the two to one of the largest on record.
Critics frame a potential negative loop: the lower STRC trades, the higher Strategy’s effective borrowing cost climbs, which can slow bitcoin accumulation and pressure MSTR’s premium to net asset value. The market, by some readings, is pressing for a roughly 100-basis-point increase to restore demand, precisely the action Mow says is unnecessary. Strategy, for its part, points to a cash buffer it says covers about 2.5 years of dividends, backed by Bitcoin worth several times the preferred’s value.
A contested call, not a settled one
Mow’s arithmetic is internally sound, but it rests on assumptions worth stating plainly. STRC is a perpetual with no maturity date, so nothing contractually forces it back to par; the pull-to-par gain materializes only if market demand returns. The ~24% figure also assumes the dividend holds and the price recovers within a year, Mow predicts a few weeks, though the discount has already persisted for more than two months.
Strategy’s own response complicates both the bull and the rulebook readings. It has declined the coupon hike its framework prescribes, holding the rate at 11.5% for months. Yet hours after Mow’s thread, it reached for a different lever: a $300 million top-up to its USD Reserve, lifting the cash buffer to $1.4 billion expressly to support the credit quality of its Digital Credit securities, alongside a 520 BTC purchase that pushed its total holdings to 847,363 Bitcoin. That buffer had been drawn down to $871 million in late May to help repurchase convertible debt and is now being steadily rebuilt.
The move is notable for what it is not, neither the inaction Mow prescribes, who wrote there was no need to increase the cash buffer, nor the dividend increase the rulebook recommends below $95. Strategy chose a third path: shoring up the reserve behind the dividend rather than raising the dividend itself. Whether that, plus a strengthening bitcoin balance sheet, pulls STRC back to par on Mow’s timeline—or whether the market still forces a coupon hike—is the open question his thread cannot settle.
Also Read: Strategy’s Bitcoin Empire Under Pressure: MSTR Slides 5% Amid Growing Scrutiny on STRC
