Strategy's STRC Preferred Stock Is Junk Credit, Not Safe Income, Analyst Warns

An analysis warns that Strategy's $8.8 billion STRC preferred stock held by retail investors is unsecured junk debt (B- rated), not the safe, bitcoin-backed income product it is marketed as.

• STRC is unsecured, subordinated perpetual preferred equity with no claim on any bitcoin — despite being marketed as 'backed by bitcoin'
• S&P rates Strategy B-, four notches into junk territory; 82.7% of STRC's $10.7 billion outstanding is held by retail investors
• Dividend obligations exceed $1.2 billion annually vs. $477 million in software revenue, forcing a reflexive funding loop of new share issuance
• The dividend is discretionary — the board can cut it at any monthly meeting with no notice or remedy

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