Strategy’s Stretch preferred stock fell to a record low on Thursday morning as Bitcoin extended its decline, putting pressure on one of Michael Saylor’s main financing tools for the company’s Bitcoin accumulation strategy.

STRC was trading near $85 after touching an intraday low of $84.88, down about 15% from its $100 par value. Bitcoin also slipped below $64,000, trading near $63,500 at press time.

Stretch, which trades under the ticker STRC, is Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock. The instrument is designed to trade around $100 while paying cash dividends to holders.

Strategy’s website lists STRC with an 11.5% annual dividend rate for June and says the rate is adjusted monthly to encourage trading around the $100 par value.

The preferred stock has become an important part of Strategy’s capital machine. When STRC trades near or above par, Strategy can issue more preferred shares through its at the market program and use proceeds to fund Bitcoin purchases.

When it trades below par, that channel becomes less attractive, forcing Strategy to rely more heavily on common stock sales, cash reserves, or other sources of funding.

Strategy’s website lists STRC with about $10.5 billion in notional value and a market cap near $8.9 billion. The preferred stock also saw about $432 million in trading volume by late Thursday morning, above its 30 day average of $368 million.

The drop comes just days after Strategy shareholders approved a shift in STRC’s dividend schedule from monthly payments to twice monthly payments.

Strategy said the move is designed to stabilize price, reduce cyclicality, improve liquidity, and grow demand for STRC. The first twice monthly record date is set for June 30, with the first payment under the new cadence scheduled for July 15.

That shift was supposed to help keep Stretch closer to par by reducing the price drop that typically follows dividend dates. Strategy expected more frequent payments to reduce the usual post dividend drawdown and allow the company to buy Bitcoin at a steadier pace.

The pressure is not isolated to Strategy. Strive’s own preferred stock, SATA, was also trading below par on Thursday, near $96.93. SATA reached an all time low of $81.02 in February before recovering.

Strive has tried to address similar pressure by moving SATA to daily dividends. The company says SATA’s 13% annual dividend will be paid every business day beginning June 16, while Strive targets a $99 to $101 trading range for the security.

The comparison matters because it shows how volatile these preferred stocks can be. STRC is designed around a $100 par value, but its drop near $85 shows that the instrument can still trade sharply below that level.

That weakens the idea that preferred shares are a safer corner of Strategy’s capital structure and can create pressure among holders expecting more stable income exposure.

That puts Saylor in a tighter position. STRC is meant to help Strategy raise capital without selling Bitcoin or issuing more common stock, but that model becomes less effective when the preferred shares trade well below par.

To restore confidence, Strategy may need to offer a higher dividend, which would raise its cash obligations. If it does not, STRC could remain discounted and become a less useful financing tool for future Bitcoin purchases.

Strategy has already warned that STRC dividends are not guaranteed and are subject to board approval. The company also says its preferred securities are not collateralized by its Bitcoin holdings and only have a preferred claim on residual company assets.

In filings, Strategy said it expects to fund cash dividends on preferred stock primarily through sales of class A common stock, while also using its dollar reserve or other capital raising activity. The company also warned that if its reserve is depleted and it cannot raise financing, it may be required to sell Bitcoin to meet financial obligations.