Strategy has established a long-term price target of $99 to $100 per share for its STRC preferred stock [1].
The move comes as the company attempts to stabilize its preferred-share value and manage capital requirements for dividends and Bitcoin acquisitions. Because the STRC shares have recently traded below their par value, the company is implementing new capital-raising actions to support the asset's price.
In June, the STRC preferred stock hit a record low of $89 [4]. While the price later saw a 24% rebound to reach $90 [3], it remained below the company's target. To address this volatility and fund dividend payments, Strategy sold approximately $104.73 million in Bitcoin [2].
These funds are earmarked for the purchase of STRC preferred stock, and the funding of dividends. The company maintains a 12% annual dividend rate for these shares [5, 6].
The announcement of the price target and the associated capital shifts coincided with a dip in the company's common stock. In pre-market trading, the common stock fell 1.15% to $92.21 [2].
Strategy's current financial strategy involves a combination of Bitcoin sales, share buybacks, and dividend adjustments. The CEO said the $99 to $100 goal is part of a broader plan to manage the company's issuance plans and overall capital structure [1].
“Strategy has established a long-term price target of $99 to $100 per share for its STRC preferred stock”
Strategy is utilizing its Bitcoin holdings as a liquidity reserve to defend the valuation of its preferred shares. By selling digital assets to buy back STRC stock and fund a high 12% dividend, the company is attempting to create a price floor and restore investor confidence in its capital structure after the shares dipped below par value.
