STRC falls below the face value: analysis of opportunities and risks after the ex-dividend

Strategy’s preferred stock (MSTR), the largest corporate bitcoin holder, has fallen below its $100 par value during pre-market trading after the completion of its most recent monthly dividend payment. While this movement partly reflects technical market mechanisms, it has garnered significant attention among investors interested in this fixed-income instrument with unique features.

What does falling below the par value mean?

The par value of STRC is set at $100, which is the base amount used to calculate the 11% annualized yield. When a preferred stock falls below its par value, investors see the total return potential decrease, as they experience not only periodic income but also capital loss. Falling below the par value can indicate broader selling pressures or changes in risk perceptions regarding the instrument.

In the specific context of STRC, declines below the par value typically occur around the ex-dividend date, when trading begins without the right to the next dividend payment. Buyers purchasing shares on or after the ex-dividend date will not receive the upcoming payment, leading to technical adjustments in the price.

Historical ex-dividend recovery patterns

Historical analysis of STRC shows recurring patterns, albeit with significant variations. In October and December, price drops after the ex-dividend date were moderate, typically around 2%, followed by quick recoveries back to the $100 par value. However, in other periods such as August and November, STRC experienced much more pronounced deviations, with declines exceeding 6%, driven by broader macroeconomic volatility, before eventually rebounding.

These patterns suggest that STRC’s behavior responds to both technical ex-dividend factors and broader market conditions. Recent trading volume analysis and an estimated 2,280 bitcoins acquired through STRC’s income from Monday to Wednesday indicate sustained capital flows into Strategy’s bitcoin treasury strategy.

The bullish case for STRC

Proponents argue that the instrument offers attractive opportunities after falling below the par value. The bullish case rests on three pillars: first, strong demand for an 11% annualized yield, significantly higher than traditional fixed-income rates. Second, high trading volume during weakness signals sustained buying at prices below par, suggesting institutional investors are accumulating positions.

Third, the historical recovery toward $100 or above after ex-dividend declines is a pattern that has been repeatedly observed, supporting expectations of returning to par value. For medium-term investors, these temporary dips present entry opportunities at lower prices while maintaining the 11% yield promise.

Downward pressures and risks to the par value

Adverse scenarios present risks that should not be ignored. If STRC remains below par for an extended period, as it did in November, Strategy might be forced to increase the yield offered aggressively to maintain investor demand. An increase in the dividend rate would have an immediate impact on Strategy’s balance sheets and affect total shareholder return.

Additionally, continuous issuance of new STRC shares to fund bitcoin accumulation could create overwhelming supply pressure if demand does not remain robust. A sustained price below $99 could signal a loss of confidence in the business model or in the macroeconomic environment supporting demand for these instruments.

Macroeconomic context: Bitcoin amid dollar weakness

Analysis of Strategy and STRC cannot be separated from the overall behavior of bitcoin and the US dollar. Unusually, bitcoin has not experienced a traditional rally during recent dollar weakness. JPMorgan analysts suggest that this dollar decline is mainly due to short-term flows and market sentiment, not structural changes in economic growth expectations or monetary policy.

From this perspective, it is likely that the dollar will stabilize as the US economy continues to strengthen. This dynamic implies that bitcoin is currently being traded more as a liquidity-sensitive asset and market volatility indicator rather than as a reliable hedge against currency weakness. The bitcoin price at $88.09K (as of January 29, 2026) reflects this characterization: it remains a risk asset correlated with broad financial conditions.

Conclusion: investor assessment

STRC represents a complex instrument combining preferred fixed income features with indirect exposure to Strategy’s bitcoin accumulation strategy. The recurring drops below par are typically short-lived, presenting opportunities for investors confident in a recovery. However, downside risks include the inability to sustain recovery and increasing pressures on Strategy to raise yields if the par value is not maintained.

Investors should carefully evaluate their risk tolerance, time horizon, and outlook on bitcoin and macroeconomic conditions before taking positions in STRC.