Strategy’s management has set a $99 to $100 trading range for its STRC preferred stock, making a return to par the company’s immediate capital-markets priority after a sharp June decline disrupted its preferred-share financing model. The target was outlined during Strategy’s second-quarter earnings call, where executives also said the company is building a larger U.S. dollar reserve and no longer expects to maintain a “100%” allocation to Bitcoin.
The shift places more emphasis on cash liquidity after Strategy reported an $8.2 billion quarterly loss, largely tied to unrealized Bitcoin losses, and paused Bitcoin purchases for a fifth consecutive week. Strategy’s executive chairman Michael Saylor said Bitcoin would remain a core treasury asset, but future balance-sheet management would include holding more dollars.
STRC’s recovery is central to that approach. CEO Phong Le said Strategy wants the preferred shares to trade over time at $99 to $100 and would repurchase stock in a disciplined manner when STRC trades below $100. Strategy shares closed at $97.70 on Thursday before falling more than 5% on Friday following the earnings release and management’s updated comments.
Management focuses on restoring STRC’s role in funding
Mark Palmer, managing director and senior equity research analyst at Benchmark, said management devoted most of a 90-minute webinar to explaining how it plans to restore STRC’s trading price. He wrote that Strategy sees the security as its primary future vehicle for raising capital to acquire Bitcoin, rather than issuing a succession of new securities across its capital structure.
Saylor said demand for STRC is “50 to 100 times” greater than demand for any other Strategy financing instrument. The company’s argument is that a more stable preferred-share price would let it raise capital with greater predictability, while reducing the need to rely heavily on convertible debt or common-stock issuance.
STRC’s June selloff exposed the risk in that model. Palmer linked the decline, which took STRC to about $70 on June 26, to broker-dealers that had extended credit against the preferred shares at advance ratios of roughly 70% to 80%. As volatility increased, some lenders reduced those ratios or withdrew credit lines, contributing to selling pressure.
Strategy had about $975 million remaining under its STRC buyback authorization after repurchasing $25 million of the security last week, according to Palmer. He estimated that STRC’s notional value exceeded its market value by about $1.2 billion, giving Strategy an incentive to buy shares below par if it has sufficient cash available.
Institutional ownership has increased despite volatility
Both Benchmark and TD Cowen pointed to growing institutional ownership of STRC. Data cited by the firms showed institutional holdings rising from $1.1 billion in mid-March to $3.1 billion as of July 1, representing 29% of the preferred stock.
Lance Vitanza, managing director and senior equity research analyst at TD Cowen, also placed institutional ownership at roughly 29%, up from 22% in March. He said the average institutional STRC position had grown to about $3.5 million.
The ownership increase offers Strategy a deeper base of holders than it had earlier in the year, though the June price decline showed that institutional participation alone does not eliminate liquidity pressure when credit providers change lending terms. Management’s proposed buyback approach would seek to narrow that gap by providing demand below par without committing the company to defend a price at any cost.
Benchmark retained its Buy rating on Strategy but cut its price target to $435 from $570. Palmer said the revision reflected a lower year-end 2026 Bitcoin assumption of $100,000, down from $125,000 previously. TD Cowen maintained its Buy rating and $260 target, which Vitanza had reduced from $400 in late June.
Cash reserve grows as Bitcoin purchases pause
Strategy’s earnings results marked a sharp reversal from the prior year. The company reported a $10 billion profit in the second quarter of 2025, compared with the $8.2 billion loss in the latest quarter. Strategy attributed the loss mainly to unrealized losses on its Bitcoin holdings as Bitcoin traded more than 40% below its level a year earlier.
The company increased its Bitcoin holdings by 11% during the quarter, reaching a peak of 846,000 BTC before beginning to sell. In a subsequent 8-K filing, Strategy reported holding 843,775 BTC. Palmer wrote that management said it had bought nearly 175,000 Bitcoin year to date and sold about 3,600, or approximately 48 Bitcoin acquired for every Bitcoin sold.
The pause in purchases has allowed Strategy to add to its dollar reserves. Le said convertible debt fell 18% during the quarter to $6.7 billion, while the company’s dollar reserve rose 12% to $2.4 billion. CFO Andrew Kang later said the reserve stood at $3.75 billion and would cover preferred dividends and interest obligations for roughly two years.
That reserve changes the company’s operating posture. Strategy has historically presented Bitcoin accumulation as the central use of capital raised through equity, preferred shares and debt. A larger cash balance gives it more flexibility to meet fixed obligations, repurchase STRC below par and wait through periods when issuing new securities would be expensive.
A more cautious treasury structure
Saylor’s remarks on ending a “100%” Bitcoin allocation signal that Strategy is adapting its funding model to the volatility of the assets and securities it uses. The company remains overwhelmingly exposed to Bitcoin through its 843,775 BTC holdings, but cash reserves now play a more defined role in protecting dividend and interest payments.
The approach also reflects the pressure created when a preferred-share instrument designed to raise Bitcoin-buying capital trades materially below its intended value. Keeping STRC near par would allow Strategy to use one familiar financing channel rather than repeatedly designing new instruments or leaning more heavily on debt.
Strategy’s next test will be whether its cash reserve, buyback authority and reduced Bitcoin buying can stabilize STRC without materially weakening the company’s long-running accumulation strategy. Management has made clear that Bitcoin remains central to the balance sheet; the near-term change is that preserving financing capacity now requires more cash and a tighter focus on the preferred shares that support it.
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