Strategy Inc., the company formerly known as MicroStrategy that has become synonymous with corporate Bitcoin accumulation, has a problem. Its perpetual preferred stock, STRC, is trading well below its $100 par value, and that’s gumming up the entire capital engine that powers its Bitcoin buying spree.

Cantor Fitzgerald analysts say fixing that is job number one. And they think investors should position accordingly, recommending either STRC at its current discount or MSTR common shares.

The STRC problem, explained

When STRC trades at par, the company can use it to raise capital cheaply and efficiently. When it trades below par, as it currently does between roughly $86 and $88, the whole system stalls.

Strategy can’t issue new preferred shares at attractive terms when the existing ones are trading at a 12-14% discount to face value. Nobody wants to buy new stock at $100 when the market is pricing the old stock in the mid-$80s.

STRC carries a variable annual dividend of 12%, adjusted monthly. Strategy has reportedly sold $216 million worth of Bitcoin in at least one instance specifically to keep those dividend payments flowing.

Why Cantor says to buy

For income-oriented investors, STRC at current levels offers that 12% variable dividend plus potential price appreciation if the stock recovers to its $100 par value. Buying at $87 and collecting 12% annually while waiting for a roughly 15% capital gain is, on paper, a pretty compelling setup.

For those with more conviction in Strategy’s broader Bitcoin thesis, Cantor points to MSTR common shares. The logic here is structural: once STRC gets restored to par, Strategy’s entire capital-raising apparatus comes back online.

Cantor’s analysts frame the preferred shares not as competition against common shareholders but as essential financing tools. The firm anticipates that Strategy will build cash reserves specifically to fund ongoing dividend payments, taking whatever measures are necessary to push STRC back to par. That includes, apparently, selling Bitcoin when needed.

The Bitcoin selling paradox

Strategy has historically used securities like STRC to finance Bitcoin accumulation. The playbook is straightforward: issue preferred stock, use the proceeds to buy Bitcoin, and let the appreciating Bitcoin holdings support the overall enterprise value.

The current situation inverts that playbook. Instead of using preferred stock to buy Bitcoin, Strategy is selling Bitcoin to support the preferred stock. The $216 million Bitcoin sale to sustain dividends establishes a precedent that Bitcoin is not, in fact, a one-way accumulation asset on the balance sheet — it’s a resource that can and will be deployed to manage capital structure obligations.

What this means for investors

If Strategy successfully restores the preferred stock to par, it unlocks lower-cost capital raises and reignites Bitcoin purchasing activity. If STRC continues to languish below par, expect more Bitcoin liquidations to fund dividends.

For MSTR common shareholders, the stock’s premium over its net asset value has historically been justified by the company’s ability to raise capital and buy more Bitcoin. Without a functioning preferred stock market, that justification weakens considerably. Cantor’s buy recommendation implicitly assumes the STRC recovery will succeed, which is worth noting as a key risk factor in the thesis.