Strategy CEO Phong Le Reveals the One Mistake Behind STRC's 25% Collapse

Strategy CEO Phong Le says the company underestimated how much borrowed money would flow into STRC, its $9.3 billion preferred stock that lost a quarter of its value this summer. STRC pays a 12% annual dividend and is built to trade near its $100 face value.

It sank to about $75 in late June and now trades at $99. Strategy’s STRC Preferred Stock Performance. Source: TradingView How Borrowed Money Sank STRC Below $100 Le explained the selloff in an interview with Natalie Brunell.

He said STRC’s calm price invited investors to borrow against their Bitcoin (BTC) at about 6% to collect STRC’s 12% yield. When Bitcoin fell, those loans came under pressure. Holders had to post more Bitcoin or sell STRC, Le said, and that forced selling drove the price lower.

“We did not expect the amount of leverage that came into the system,” Le explained. Le said traders later bought STRC between $75 and $90, and that he bought some himself.