$450 Million Raised Yet Stock Price Still Falls, STRC Never Lacked Money
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$450 Million Raised Yet Stock Price Still Falls, STRC Never Lacked Money
The core challenge of STRC is the collapse of trust.
Navigating Web3 tides with focused insightsWritten by: Protos
Compiled by: Luffy, Foresight News
On Monday morning, Michael Saylor heavily promoted having more cash on hand to support dividends to soothe the market, but STRC's price saw almost no boost. The core issue in the market lies not in cash reserves, but in the collapse of investor confidence.
As the publicly listed company holding the largest amount of Bitcoin globally, Strategy added $450 million in cash reserves last week by diluting common shareholder equity. The company's total cash scale currently reaches $3 billion, compared to the $2.55 billion disclosed on July 5, representing a 17% increase in cash.
Sufficient cash should have brought a sense of security to the market, but STRC preferred stock investors, who rely on cash for semi-monthly dividend distributions, are not buying it. As of Monday early trading, STRC price fell to $86.60, down 1% from last Friday's closing price.
The expansion of the company's cash reserves is theoretically sufficient to support STRC dividend distributions for a longer cycle; in any other financial product, this would be a major positive signal boosting confidence, yet STRC's stock price fell instead of rising. This enterprise has a deep-seated problem that no amount of cash can solve.
Market Completely Indifferent to Positive News
Strategy originally designed STRC hoping its price would fluctuate steadily over the long term, but instead, its violent fluctuations frequently made financial headlines. Strategy regularly adjusts the dividend rate, publicly claiming the goal is to stabilize the stock price within the $99 to $100 par value range, but this goal has never been achieved.
When the stock price falls, Strategy increases dividends to attract buyers, propping the price up towards the $100 par value; when the price is too high, the company issues more stock to suppress the rise. Ironically, since the product launch, the dividend rate has been adjusted up from 9% to the current 12%, yet STRC price has continued to decline.
Even though the company holds cash sufficient for 20 months of dividend payments, with yields far exceeding most junk bonds, today's STRC trading price still trades at a 13% discount to par value.
STRC Price Chart, time range from last Friday's close to Monday noon. Source: TradingView
After the company's cash reserves expanded by 17%, STRC's current price is instead lower than the level before the cash expansion.
The logic behind this is far simpler than cash scale, equity dilution ratios, or leverage calculations; the root of the problem is a lack of market trust. The broader Bitcoin market has not embarked on an upward trend, unable to lift the valuation of the company's massive Bitcoin treasury assets. The only reason investors were willing to buy back STRC at a premium to par value was originally belief in management's determination to pay dividends long-term. But now the market has numerous reasons to question management's sincerity in fulfilling commitments.
The essence of preferred stock is a contractual promise: distribute dividends on time, comply with issuance terms, and fulfill all agreements in the prospectus. Investors' decisions also highly rely on performance guidance and forward-looking judgments given by management. Investors are bearish on STRC, not doubting the real existence of the $3 billion cash, nor unable to calculate how long this fund can support dividend payments; but rather no longer believing the person who made the payment commitment — Michael Saylor.
Saylor Repeatedly Changes Commitments, Consuming Market Trust
Strategy founder Saylor has previously overturned expectations he released to the outside world multiple times, and every change of statement has significantly discounted market trust in him.
Last summer, the company promised investors: unless used to pay interest and preferred stock dividends, it would not issue additional MSTR common stock below 2.5 times market Net Asset Value (mNAV). But just a few days later, the company quietly modified the commitment, adding an exception clause: as long as management deems the issuance beneficial, it can be unrestricted. Subsequently, the company sold hundreds of millions of dollars worth of stock below the 2.5x mNAV threshold.
Another more representative case is: for many years, Saylor repeatedly claimed to the outside world that the company would never sell Bitcoin, statements verifiable across major interviews and social media platforms. But from late June to early July, Strategy sold a total of 3,588 Bitcoins, while simultaneously approving over $1 billion in quota for subsequent reductions. There are many similar contradictory matters.
In early 2026, Saylor assured the market: even if Bitcoin enters a bear market, the company would rely on debt financing for turnover and would not sell Bitcoin. He stated in a CNBC interview that during the bear market phase, only refinancing existing debt extensions would be needed. Only a few months later, the company did not choose debt restructuring, but instead relied on selling Bitcoin to raise dividend funds.
In addition, Saylor also significantly lowered performance expectations, making it difficult for investors to believe all his subsequent predictions. Last December, Strategy significantly lowered the fiscal year 2025 earnings per share guidance from $80 to less than $19, directly wiping out 76% of expected profits.
Even with Cash Backing, STRC Is Absolutely Not a Principal-Protected Investment
Saylor once compared STRC to high-interest deposit accounts and money market fund products. But in June, STRC once fell to a historical low of $71.25, with holders suffering book losses exceeding one-third, having no comparability with bank deposits or money market funds backed by insurance.
Saylor previously claimed STRC price would stabilize at $100, but reality saw it fall to $71.25, with investors suffering widespread losses; the market finds it hard to believe his predictions on the product's stable trend anymore.
STRC is neither a deposit nor a money market fund, has no independent segregated Bitcoin assets as collateral, nor does it provide free redemption rights. Investors wanting to sell their STRC at $100 can only find other buyers to take over; the company itself will not enter the market to support the price through buybacks.
Management's repeated changes of mind have precedents, far earlier than the company's phase of hoarding Bitcoin. In 2000, the U.S. SEC sued Saylor and two other executives, accusing the company of inflating revenue and profits, violating accounting standards. Ultimately, Saylor paid over $8 million to settle the civil lawsuit.
After more than twenty years, the market is once again wary of Saylor. This time the company added 17% cash reserves, with the original intention of stabilizing STRC's $100 par value, but the positive news was completely ineffective: Monday early trading stock price still traded at a 13% discount to $100, even falling slightly compared to last Friday. No amount of cash can make up for long-term overdrawn market trust.
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