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Strategy, Michael Saylor’s bitcoin treasury company, just lost 40 years of projected dividend coverage in seven months. That’s not a typo.
Back in November 2025, the company was telling investors it had roughly 71 years of dividend coverage at stable bitcoin prices. The math was simple enough: take the market value of its bitcoin holdings, divide by projected annual dividend payments, and you get a runway. A long one, supposedly. But the latest disclosures put that number at 31 years — a drop that’s hard to spin as anything but brutal. Bitcoin fell, share issuance ballooned, and the two problems fed each other in the worst possible way.
How the Math Fell Apart
Strategy calculates dividend coverage by dividing its bitcoin holdings’ market value against projected annual dividend payments. Both sides of that equation moved in the wrong direction at once.
Bitcoin dropped from around $90,000 to $63,000. That’s a big hit to the numerator. And on the denominator side, Strategy kept issuing preferred shares — specifically STRC, its largest dividend-paying stock. On November 20, 2025, STRC’s total face value sat at $2.8 billion. It’s now $10.5 billion. That’s not a modest increase. That’s nearly a fourfold jump in the company’s dividend obligations in under seven months, and the asset meant to cover those obligations lost roughly 30% of its value over the same stretch.
So the coverage ratio didn’t just drift lower. It collapsed.
STRC Hits an All-Time Low
STRC was supposed to trade near its $100 par value. That was kind of the pitch — a preferred stock with an 11.5% annualized variable dividend rate, marketed with at least an implicit promise of price stability. It’s not holding up.
The stock hit an all-time low, falling to $82.53. That’s a 17.5% drop from par. For a security sold largely on the premise of stability, that’s a rough place to be. And it’s probably not where investors expected to find themselves when they bought in.
The 11.5% dividend rate, meant to attract buyers, didn’t prevent the slide. It’s a variable rate, and the market’s clearly pricing in real risk here — not just bitcoin volatility, but the structural problem of a company issuing more and more preferred shares to buy an asset that’s currently underwater.
The Dilution Problem Gets Worse
Here’s the core issue. Strategy keeps issuing preferred shares to raise cash. That cash goes toward buying bitcoin. Bitcoin is now worth less than what they paid for much of it. And the preferred shares they issued to fund those purchases carry dividend obligations that require actual U.S. dollars to service — not bitcoin, not paper gains. Cash.
So the company is in a position where it needs real money to pay dividends on shares it sold to buy an asset that’s lost significant value. That’s a tough spot. And it gets tougher the more shares they issue, because each new batch adds to the annual obligation.
Strategy hasn’t spelled out exactly how it plans to manage this. No clear roadmap has come out. The company has yet to provide clarity on how it handles the growing gap between its obligations and the value of the assets backing them.
The STRC face value going from $2.8 billion to $10.5 billion is the number that probably deserves more attention than it’s getting. That’s a massive increase in what the company owes preferred shareholders, and it happened fast. Dilution at that pace is hard to absorb even in a bull market. In a bear market, with bitcoin down sharply, it’s a different problem entirely.
Some investors probably assumed Strategy’s bitcoin-heavy balance sheet would hold up as long as bitcoin held up. That’s basically true — but bitcoin didn’t hold up. And the preferred stock structure means the pain doesn’t just sit quietly on a balance sheet. It shows up as cash obligations that have to be met regardless of where BTC trades.
STRC’s variable dividend rate was supposed to be a feature. Right now it looks more like a risk. The stock is trading at $82.53, the face value of the preferred series has grown nearly fourfold since November, and the company’s dividend coverage runway just got cut almost in half.
Frequently Asked Questions
How much has Strategy’s dividend coverage dropped?
Strategy’s projected dividend coverage fell from 71 years to 31 years, a drop of 40 years over roughly seven months.
What is STRC’s current share price and par value?
STRC hit an all-time low of $82.53, well below its $100 par value, representing a 17.5% decline from its target price.
