rewrite this title in other words: Normal Preferred Behavior or Warning Sign?

Some observers noted that lower share prices and higher yields can create a feedback loop that may become harder for Strategy to manage.

Strategy’s preferred stock STRC closed Wednesday at $94.65, about 5% below its $100 par value, touching off a wave of alarm on social media.

While some critics have aired concern about the sustainability of the structure that has helped fund Strategy’s Bitcoin buying spree, a few supporters argue that STRC’s move down is normal for preferred securities.

STRC Is Acting Like a Preferred Stock

One of those pushing back against the panic was crypto commentator Scott Melker, known as The Wolf of All Streets to his 1 million followers on X.

“A 5% discount to par is not evidence that something is broken,” he wrote in a June 4 social post. “It’s evidence that investors are demanding higher yield, pricing risk, or reacting to market conditions – exactly what preferred stocks do.”

The mechanics here matter. STRC launched in July 2025 at a $100 par value, not a price floor, and according to the analyst, that par figure determines how liquidation preference and certain redemption provisions work, but it does not obligate the stock to trade there.

He pointed out that many preferred stocks often spend long periods below their stated par, and STRC’s monthly dividend adjustment was designed to pull the price back to $100 by raising the yield when demand softens. As of today, Strategy’s data shows STRC trading at $94.65 with an effective yield of 12.15%, which is higher than its current dividend of 11.50%. The larger market yield is a direct result of the lower share price.

That dynamic became a focal point of the debate, with Bitcoin author Adam Livingston arguing that the market is simply pricing risk at a 12.5% yield.

The Risk Underneath the Yield

Despite Melker’s assurances, the concern gaining traction goes beyond bond math. Strategy’s total preferred dividend obligations are close to $1.7 billion per year, and, as Bitcoin critic Peter Schiff previously pointed out, its software business does not come close to covering that figure.

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Recall that the payments largely depend on the company’s ability to keep issuing new STRC shares, which, as several observers noted in the comments section of Melker’s X post, can become more difficult if the shares continue to trade below par.

Schiff, who called STRC a Ponzi scheme back in April, argued that the lower STRC trades, the more Strategy will have to raise the official dividend to stabilize it, and that would see it burning through cash faster and pulling forward any eventual Bitcoin sales.

Last month, crypto media personality Ran Neuner made a similar point, stating that if STRC doesn’t recover to $100, Strategy can’t issue more shares at par, which would then limit its ability to raise cash. As a result, the market would then start pricing STRC below par more permanently. This would force further yield increases to attract buyers, which would in turn require more cash, potentially including BTC sales, to fund those payments.