This week, Strategy’s STRC shares fell below their $100 par value for the first time in months. Peter Schiff has launched a harsh attack on Michael Saylor. We break down what happened.
Strategy’s floating-rate preferred stock dipped to $82.5 on June 18, well below its $100 par value. At press time, shares are trading around $88. The drop has intensified criticism of the company and its founder Michael Saylor.
Hot topic: Bitcoin Price Stagnation Endangers Saylor’s STRC, Analyst Warns
Gold advocate and longtime bitcoin skeptic Peter Schiff said Saylor’s “financial house of cards is collapsing” and predicted the entrepreneur will end up in prison. Strategy fired back with a statement that its bitcoin reserves are enough to cover 32 years of dividend payments.
What Is STRC and Why Is It Falling? ‘Digital Credit’ Mechanism Under Pressure
STRC is a floating-rate preferred share issued by Strategy in July 2025. The instrument is marketed as a yield-generating “digital credit” with a $100 par value and a yield of about 11.5% annually. The mechanism calls for monthly dividend adjustments to keep the price near par.
When the share trades above $100, the company issues new shares and uses the proceeds to buy bitcoin (BTC). With STRC now trading at more than a ~10% discount, the issuance program has been paused.
CoinShares’ James Butterfill noted that STRC’s weakness “is driven more by uncertainty around how Strategy plans to finance its fixed obligations than by bitcoin itself.”
According to the company, the outstanding par value of STRC is $9.2B, creating an annual debt burden of about $1.3B. Strategy’s cash reserve at the end of the first quarter was $1.1B—enough to cover dividend payments in the coming months, but not for years ahead.
Read more: Strategy’s Saylor Unveils Five-Layer Bitcoin Economy Model — How It Works
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Peter Schiff’s Reaction and Strategy’s Counterarguments
Schiff claimed Saylor will soon trade his orange tie for an orange jumpsuit. He also accused Saylor of violating SEC rules and urged aggrieved investors to file lawsuits.
Strategy responded on social media:
“We have 32 years of dividend coverage through our bitcoin reserve.”
The company compared its $55B in BTC▲$63,071.00 to $1.7B in annual dividend and interest expenses. But critics, including Schiff, argued the calculation doesn’t account for potential dividend rate increases, additional issuances, or a drop in bitcoin’s price.
“If you start selling bitcoin to cover obligations, the price will fall even faster, draining reserves,” he said.
‘Death Spiral’ Risk and Analyst Views
At the end of May, Strategy sold 32 BTC, about $2.5M, to pay dividends—its first sale since 2022—which fueled investor concerns. Since then, however, the company has bought more than 3,000 BTC worth about $200M.
Benchmark-StoneX analysts believe STRC’s current drop is a function of the built-in mechanism, not a sign of crisis.
“When the dividend rate falls below market rates, the price adjusts. We expect Strategy to raise the dividend in early July, which should push the price back toward par,” said managing director Mark Palmer.
CoinShares head of research Butterfill doesn’t see an “existential threat” but acknowledges the funding model has become less efficient, requiring investors to demand a higher risk premium.
If STRC continues to trade at a deep discount, Strategy may face a choice: raise dividends, increasing cash costs, or cut bitcoin purchases. The company has kept the yield at 11.5% for four straight months. The next dividend announcement is expected in early July.
Learn more: What Does Strategy Do? How Michael Saylor Built a Bitcoin Corporate Empire
