Strategy’s STRC preferred stock falls to $97.72, below its buyback band, as MSTR drops 9.6%

Update, 19 October 2026, 17:30 UTC: Strategy kept buying back STRC during the week of the selloff. Its weekly 8-K filed on Monday 19 October reports 1,938,780 STRC shares repurchased between 12 and 18 October for $193.1 million, about $99.60 a share on average (our calculation; the filing gives neither the days nor the prices of the trades). The buyback was paid with USD Cash. Strategy sold no preferred stock of any series that week.

It also bought 267 BTC for $22.1 million, at an average of $82,900 including fees, funded by selling 140,872 MSTR shares through the common-stock at-the-market programme ($22.0 million net) plus $0.1 million of USD Cash. Holdings reached 848,517 BTC, bought for $64.02 billion at an average of $75,446, about 4.04% of the 21 million bitcoin that can ever exist (our calculation). Bitcoin Magazine counts it as the third purchase of October, about $73 million in all; our sum from the three October 8-Ks is 851 BTC for $72.3 million.

The board raised the authority for buying back Strategy’s preferreds, which the company calls digital credit, from $2.0 billion to $3.0 billion, leaving $1.16 billion available on 18 October. Without the increase, about $161.7 million would have been left, less than one week at the recent pace (our calculation).

STRC traded at $99.04 at 16:37 UTC on Monday, up 1.4% from Friday’s $97.72 close and back inside the $99 to $100 band after a session low of $97.92, on Yahoo Finance data. MSTR was at $138.23, up 1.0%, and bitcoin near $81,900. Criptovaluta.it called the buyback badly timed, bought near par just before Friday’s fall; the 8-K does not say on which days Strategy bought.

Strategy’s STRC preferred stock, the security the company sells to raise money for bitcoin, closed at $97.72 at the US close (20:00 UTC) on Friday 16 October, down 1.8% from $99.53 a day earlier and its lowest close since 16 September, according to Nasdaq’s price history. That puts it well under the $99 to $100 band Strategy has been defending with buybacks. The common stock, MSTR, fell 9.56% in the same session to $136.83, its steepest one-day fall since at least April on Yahoo Finance data. Bitcoin moved less than 1%.

The slide came days after Strategy spent $192.4 million buying back STRC near par, and on the day it filed an 8-K keeping the STRC dividend rate at 12% for November. For a company that funds much of its bitcoin buying by selling this preferred close to $100, the STRC print matters more to the funding model than the headline drop in MSTR.

Volume in STRC rose to about 2.4 million shares on Nasdaq’s count, against 1.78 million on Thursday. Friday’s close was the first below $99 since 25 September. In the second half of September the preferred spent several sessions under $99, with a low close of $97.07 on 16 September, before recovering to between $99.43 and $99.90 in the first half of October. One Italian outlet, Criptovaluta.it, put Friday’s close at $97.50 and the fall at about 2.5%; Nasdaq and Yahoo Finance both give $97.72, the figure used here.

STRC preferred stock and MSTR on Friday 16 October: the closes side by side

The table compares Friday’s closes with Thursday’s. The bitcoin figures are Yahoo Finance daily closes, because bitcoin trades around the clock and has no US close.

MSTR had risen 5.6% on Thursday, from $143.24 to $151.29, so Friday erased that gain and more. From $164.43 at the close on 5 October, the stock lost about 16.8% in nine sessions (our calculation from Nasdaq and Yahoo closes). The Nasdaq Composite fell 2.14% on Friday in a technology selloff, Yahoo Finance reported, which accounts for part of the MSTR move.

Metaplanet, the Japanese bitcoin treasury company, closed higher on Friday only because the Tokyo session ends before New York opens. Its first session after the US selloff was Monday 19 October.

Bitcoin itself barely moved. It ended Friday near $81,500 on Yahoo’s daily data and traded near $82,010 at 12:06 UTC on Sunday 18 October, up 0.7% over 24 hours and down 1.2% over seven days, on the market data Coindaro uses. The stock that holds it fell about twelve times as far on Friday.

The background: a buyback week, then MSCI’s index rule

In the week to 11 October, Strategy spent $192.4 million repurchasing 1,932,145 STRC shares while buying only 250 BTC, as we reported in our piece on Strategy spending more on STRC buybacks than on bitcoin.

After the US close on 15 October, MSCI adopted a rule that will make companies it classes as non-operating ineligible for its global indexes from the close of 30 November, which we covered in our report on the MSCI rule that could drop Strategy and Metaplanet. Friday was the first full session after that decision.

In August, executive chairman Michael Saylor described a $99 to $100 target range for STRC repurchases, according to Yahoo Finance. Friday’s close sits $1.28 under the bottom of that range.

Why STRC at $100 matters for Strategy’s funding

STRC, which Strategy calls Stretch, is a perpetual preferred share with a $100 par value and a variable dividend the company can reset each month. The current rate is 12% a year, paid on par. The aim is to set the dividend high enough that the share trades near $100, so Strategy can sell new STRC at about that price through an at-the-market (ATM) programme and use the cash to buy bitcoin.

That only works near par. At $99.50, each new share raises close to $100 for $12 a year of dividends at the current rate. At $97.72, the same $12 buys less cash, and the share is no longer priced where the company says it wants it. In the week to 11 October Strategy sold no STRC at all and bought shares back instead. It did the same in the week to 18 October.

The capacity left unused is large. The 12 October press release filed with the SEC showed $17,510.8 million of STRC still available in the ATM, more than any other preferred line (STRD $4,014.8 million, STRK $2,100.0 million, STRF $1,619.3 million). The common-stock ATM had $18,807.6 million left, and sales of 125,183 MSTR shares supplied $21.0 million of the $21.5 million spent on bitcoin that week.

At Friday’s close, a 12% dividend on $100 par, or $12 a year, equals about 12.3% of the $97.72 market price (our calculation, before tax, and assuming the rate stays at 12%, which the company does not guarantee).

The money set aside for preferred dividends and debt interest is the USD Reserve, $4.88 billion as of 11 October, with a further $640.5 million of USD Cash that management can use for other purposes, per the same release. By 18 October the two stood at $4.83 billion and $447.3 million, after $45.5 million of preferred dividends paid from the reserve and the STRC buyback paid from USD Cash, according to the 19 October 8-K. We have not found STRC’s current share count in a filing dated this month, so we do not give a coverage ratio.

Two weeks of STRC buybacks: $385.5 million near $99.60

Over the weeks to 11 and 18 October, Strategy repurchased 3,870,925 STRC shares for $385.5 million, about $99.59 a share on average (our calculation from the two filings). It sold no new STRC in either week. For holders, that means the company has been the buyer close to $100, inside the band Saylor described in August. It did not stop Friday’s close at $97.72, and the filings do not show whether Strategy bought anything that day. Adding the 740,634 shares bought for $73.7 million between 1 and 4 October, reported in the 5 October 8-K, October buybacks come to $459.2 million (our sum).

The cash came from USD Cash, the pot management uses for general purposes, and not from the USD Reserve that backs dividends. USD Cash fell from $640.5 million to $447.3 million in a week. At about $193 million a week, that balance covers a little over two more weeks of buybacks unless it is topped up, for instance with share sales (our calculation; Strategy has not said how it will fund further repurchases).

The authority is the looser limit. The $1.16 billion now available equals about six weeks at the same pace. The dividends themselves come out of the reserve: $45.5 million in the week, leaving $4.83 billion.

The 16 October 8-K: STRC rate held at 12%, daily dividends put to a vote

On Friday, the day of the selloff, Strategy filed an 8-K reporting decisions taken on 15 October. The regular STRC dividend rate for November record dates will be 12.00%, provided a condition tied to the vote is met. Management repeated that it will recommend keeping that rate “until STRC has demonstrated sustained, healthy trading near $100 per share”.

The board also declared daily cash dividends for every calendar day from 1 to 30 November, of $0.03 or $0.04 a share per day and $1.00 in total for the month, which is 12% a year on $100 par divided by twelve.

Those daily payments happen only if common shareholders approve the Daily Dividend Amendments at the special meeting on 28 October by 5:00 p.m. New York time on 31 October, and if the amended certificate is effective by 12:01 a.m. Eastern on 1 November. If not, the 15 November dividend declared on 30 September stays payable, and the company expects, subject to its board, to keep STRC’s twice-monthly schedule. The filing says the two can never both become payable.

Strategy also said it expects the November daily dividends, if paid, to count as non-taxable return of capital for US federal income tax, up to a holder’s tax basis in STRC. That is the company’s expectation as of 16 October, not a ruling.

Who votes on 28 October, and what it takes to pass

Preferred holders do not vote. The meeting is held only by webcast at 10:00 a.m. Eastern time, and only holders of common stock at the close of business on 25 September take part: 402,337,658 Class A shares with one vote each and 19,640,250 Class B shares with ten votes each, according to the definitive proxy filed on 5 October.

A quorum is the holders of a majority of the voting power of outstanding common stock. Passing the amendments takes more than a majority of votes cast: it needs a majority of the voting power of all outstanding common stock, so abstentions and broker non-votes count as votes against.

The amendments also cover STRF, STRK and STRD. Those three would keep quarterly payments through a 31 December payment for holders of record on 15 December, with the first daily payment on 4 January 2027.

The proxy gives the reasoning. Daily record dates are meant to reduce the accrued dividend built into the price and the price adjustment when a dividend is paid, and, for STRC, to help keep the share “at or close to” its $100 stated amount. Only trading from November will show whether that works.

MSCI hits MSTR more directly than STRC

For the common stock, the index link is direct. Strategy says MSCI-linked funds hold about 13 million MSTR shares, roughly $1.8 billion at Friday’s close, Yahoo Finance reported. Friday’s MSTR volume was close to 32 million shares.

STRC is a different case. The MSCI rule is about eligibility for equity indexes, and index funds selling MSTR do not explain a fall in the preferred. No source we found establishes why STRC fell on Friday. Criptovaluta.it linked it to a similar fall in Strive’s preferred and to strain in parts of the corporate credit market tied to data centres; we have not seen that confirmed elsewhere, so it remains one outlet’s reading.

Strive is the nearest comparison: it sold $630 million of its SATS preferred at $90, covered in our piece on what a 16.7% bitcoin-backed yield means. Even after Friday, STRC trades much closer to its $100 par than that.

What Saylor has said about buybacks and bitcoin purchases

Yahoo Finance quotes two remarks by Saylor without saying when or where he made them. On buying back common shares, he said the company would act at “a very, very deep discount to NAV”. Strategy had $1.0 billion of MSTR repurchase authority left on 11 October, and $354.8 million for its preferreds. The 19 October 8-K shows no MSTR buyback in the following week, the same $1.0 billion left, and $1.16 billion for the preferreds after the increase.

On bitcoin, he said “we will tend to buy less Bitcoin in a weak Bitcoin market than in a strong market.” The 250 BTC bought in the week to 11 October, at an average of $86,194, was a small lot by the company’s standards, and at Friday’s level near $81,500 it was about 5% under cost. The next week’s 267 BTC, at $82,900, was another small lot. The full 848,517 BTC, bought for $64.02 billion at an average of $75,446, would be worth about $69.5 billion at $81,926, the price at 16:37 UTC on 19 October (our calculation, a paper gain of about 8.6%).

On 13 October, Saylor told Bloomberg he expects bitcoin to move back above $100,000. That is his forecast.

What is still unknown about the selloff

The 19 October 8-K answered two of the questions we raised on Sunday: Strategy bought STRC back rather than selling it, and paid for its bitcoin almost entirely with MSTR sales. Others remain open.

• Strategy’s mNAV, the ratio of its market value to the value of its bitcoin, after Friday. Yahoo Finance put it near 1.07 in August; we could not check a current figure, and Strategy’s dashboard did not load for us.
• Why STRC fell on Friday. The 8-K says what Strategy did during the week, not what drove the price.
• Which other index providers, if any, will follow MSCI.

The June episode gives the scale. With bitcoin down to $58,000, STRC traded as much as 26% under par on 25 June, The Block reported, and MSTR dropped below $87. The preferred then climbed back towards $100 over the summer, with a dip under $99 in late September. Friday’s 1.8% fall is small next to June.

The dates that decide the next month

Most of the calendar is fixed in filings.

• Monday 19 October: the weekly 8-K, filed before the US open, showed $193.1 million of STRC repurchased, 267 BTC bought and no preferred sold.
• Monday 26 October: the next weekly 8-K, if Strategy keeps its usual Monday filing, two days before the vote.
• Wednesday 28 October, 10:00 a.m. ET: special meeting on the Daily Dividend Amendments, with 5:00 p.m. New York time on 31 October as the approval deadline.
• Thursday 29 October, after the US close: Strategy’s third-quarter results, according to earnings calendars.
• Sunday 1 November: first record date for STRC daily dividends, if the amendments pass and take effect in time.
• Wednesday 11 November: MSCI publishes its final list of affected companies.
• Monday 30 November: the MSCI rule takes effect at the close.

For the wider market week, including the Federal Reserve’s blackout and token unlocks, see our crypto week ahead for 19 to 25 October.

Monday’s 8-K covers the trading week that ended with Friday’s fall: about $193 million of STRC bought back near par, none sold. The 26 October filing will be the first to cover trading after Friday’s close, and will show whether the buying went on as the vote approached.