STRC’s decline to about $88 gives critics of leveraged Bitcoin accumulation fresh ammunition as scrutiny of treasury-company financing models intensifies.
- Michael Saylor urged Bitcoiners to focus on the “99% that matters,” saying “the opportunity is bigger than the argument.”
- The comments came as Strategy halted at-the-market sales of its STRC preferred shares after the security fell below its $100 par value.
- Twenty One Capital’s Jack Mallers recently argued that companies issuing perpetual preferred equity are “signing up to owe money forever,” pointing to STRC’s roughly 11.5% perpetual coupon.
Strategy Inc (MSTR) Executive Chairman Michael Saylor called for unity among Bitcoin (BTC) advocates on Sunday as debate over Bitcoin treasury strategies continues to divide some high-profile executives.
“Bitcoiners agree on the 99% that matters. We shouldn’t let the 1% divide us while nearly all global capital has yet to enter Bitcoin’s monetary network. The opportunity is bigger than the argument,” Saylor wrote on X.
His post comes as one of Strategy’s key financing vehicles faces growing pressure. The company’s Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC, has fallen below its $100 issuance par value, forcing Strategy to pause at-the-market sales of the security after indicating further issuance was no longer viable at current prices.
Strategy has not formally announced a pause, but the company’s weekly SEC filings showed zero STRC ATM issuance for both the first week and the second week. The Block reported on June 18 that the program had been suspended after STRC closed at $88.59 — well below its $100 par value.
STRC’s price closed at $88 on Friday. On Stocktwits, the retail sentiment around STRC remained in the ‘extremely bullish’ zone, while chatter around it stayed in the ‘extremely high’ levels over the past day.
STRC Pressure Adds Fuel To Treasury Debate
The decline has added a new dimension to an ongoing dispute between Saylor and Twenty One Capital (XXI) CEO Jack Mallers over how Bitcoin treasury companies should fund future accumulation.
Speaking at BTC Prague earlier this month and expanding on those comments in a follow-up podcast, Mallers argued that Bitcoin treasury firms issuing perpetual preferred equity were effectively “signing up to owe money forever.”
Mallers specifically pointed to Strategy’s STRC preferred shares, describing them as non-callable securities that do not convert into common equity and carry a coupon of roughly 11.5% indefinitely.
Unlike the convertible bonds Strategy issued during earlier phases of its Bitcoin acquisition strategy, the preferred shares cannot be retired through equity conversion, he said.
“The new perpetuals can never be wiped out,” Mallers said, contrasting them with Strategy’s earlier convertibles, some of which carried coupons as low as 0% and could ultimately disappear from the capital structure through conversion.
Critics Point To STRC’s Slide
Mallers also argued that a Bitcoin treasury company whose stock no longer trades at a premium and whose Bitcoin position falls underwater would eventually face only a handful of options, including selling Bitcoin, issuing dilutive common stock, suspending preferred payments, or generating cash flow elsewhere to service the perpetual obligation.
He contrasted that model with the approach at Strike, whose Bitcoin-backed lending business could provide recurring cash flow to support long-term treasury operations.
MSTR’s stock closed down over 3% on Friday. On Stocktwits, the retail sentiment around MSTR remained in the ‘bullish’ zone, while chatter around it stayed at ‘normal’ levels over the past day.
Read also: Arthur Hayes Says Michael Saylor Is Pulling ‘Jedi Mind Tricks’ On Whether Strategy Will Sell More Bitcoin
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