Strategy’s Stretch Preferred Falls to $73, Hits Record Low as Bitcoin Slides
Summary
- The perpetual preferred stock Stretch, issued by Strategy, the world’s largest corporate holder of Bitcoin (BTC), fell to a record low of $73 in premarket trading.
- Strategy has about $871 million in cash against annual preferred dividend obligations of $1.7 billion, leaving enough to cover roughly six months of dividend payments.
- The perpetual preferred stock SATA issued by Strive, a rival Bitcoin digital asset treasury company, also fell to $83.5, its lowest level since February.
Forecast Trend Report by Period
Strategy’s perpetual preferred stock, Stretch, fell further into the low-$70 range as Bitcoin weakened.
Odaily reported on June 26 that Stretch traded at $73 in premarket trading, the lowest level since Strategy issued the security in July last year.
Stretch is a perpetual preferred stock that Strategy issues to fund Bitcoin purchases. The company needs the shares to trade near their $100 par value to raise additional capital through at-the-market offerings.
The concern is Strategy’s cash position. The company is estimated to hold about $871 million in cash.
Its annual preferred dividend obligations total about $1.7 billion, meaning its remaining cash would cover roughly six months of dividend payments.
Meanwhile, the perpetual preferred stock of Strategy rival Strive, a Bitcoin digital asset treasury company, has also continued to decline. Odaily said Strive’s perpetual preferred stock, SATA, traded at $83.5 in premarket trading on June 26.
That marked its lowest level since February. Odaily added that Strive has continued paying daily dividends despite the recent downturn.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul