Strategy Variable Rate Perpetual Stock Remains Below Parity After Five Months

Strategy has failed to restore STRC, its variable rate perpetual stock, to its $100 par value despite repeatedly purchasing hundreds of millions of dollars worth of the instrument ¹. STRC has traded beneath parity continuously since May 15, remaining below the threshold as of Oct. 20 despite repeated commitments from corporate leadership to resolve the discount ¹.

Corporate efforts to re-peg STRC included issuing new shares of MSTR, occasionally liquidating small portions of its massive $BTC treasury, and repurchasing large volumes of circulating perpetual shares ¹. Those actions have not closed the gap ¹. At the time of writing, $BTC traded around $82,715.

Regulatory and Index Headwinds

The asset suffered compounded pressure following an announcement from MSCI classifying MSTR as a "non-operating business" and scheduling its removal from Global Investable Market Indexes ¹. The discount broadened earlier in September when the legislative failure of the CLARITY Act coincided with a 7% drop in MSTR and pushed STRC from approximately $0.99 down to $0.97 ¹.

These market headwinds followed an earlier downturn triggered when Strategy disclosed an $8 billion quarterly loss in its second-quarter earnings report, which depressed valuations across both common equity and the perpetual stock ¹. Strategy is scheduled to report its third-quarter financial figures on Oct. 29 ¹.