Overview
- STRC, Strategy’s variable‑rate perpetual preferred, plunged to an intraday low near $82.50 on June 18 before recovering into the high $80s, while Strive’s SATA also fell below par and rebounded.
- Market participants and issuer posts point to a clustered margin liquidation of leveraged holders as the trigger, with forced selling feeding further margin calls and heavy out‑of‑hours volume.
- Strive and Strategy said their credit fundamentals and dividend reserves were intact and took immediate steps including Strive boosting SATA reserves to 18 months and buying $50 million of STRC to support prices.
- The episode highlighted funding strain created when Strategy used part of a dollar reserve to repurchase $1.5 billion of convertibles, a move that cut its cash cushion to roughly $871 million and lowered STRC dividend coverage.
- Broader consequences include likely broker reviews of margin rules, tighter leverage for preferreds, and hard choices for issuers such as raising payouts, running buybacks, selling Bitcoin, or issuing equity each of which carries tradeoffs for cash, dilution, and the Bitcoin‑accumulation narrative.