BitPlanet Says Strategy's STRC Regains $100 Par, but Fundraising Function Still Not Normalized

Strategy's perpetual preferred stock, STRC, has regained its $100 par value. BitPlanet said that does not yet mean its fundraising function has returned to normal.

BitPlanet Research Lab published a report on Nov. 11 titled "STRC Reaches $100 Without New Issuance" and made that assessment.

According to the report, STRC hit $100 intraday on Nov. 4 and closed at $99.98. That was about 34.1% above its June 26 close of $74.57.

BitPlanet noted that the price recovery coincided with Strategy's large-scale share repurchases. Strategy bought about 23.07 million STRC shares for a total of $2.2514 billion from July 20 through Nov. 1. By contrast, new STRC issuance, which had been halted since May, had not resumed as of the company's Nov. 2 filing.

The cash drain from the buybacks was also flagged as a risk factor. Strategy's general-purpose dollar cash, or USD Cash, fell from $1.59 billion on Aug. 23 to $132.7 million on Nov. 1. BitPlanet said continued buybacks may require external financing, including additional common stock issuance.

"STRC's market price has returned to around $100, but it remains difficult to confirm whether the recovery was driven by voluntary demand from external investors sufficient to fill the gap left by the company's direct purchases," BitPlanet wrote.

It added that a price recovery alone does not justify concluding that the company's fundraising function through securities issuance has normalized. What still needs to be verified, it said, is whether the broader market can absorb new issuance on its own without direct intervention by the company.