Par Value

DEFINITION

The stated $100 issue price a preferred share is designed to trade at. It isn't a floor or a guarantee — it's a reference point, and how far a stock trades below it is the market's real-time verdict on whether it believes management's promises.

Every share of preferred stock is issued at a fixed price — almost always $100 — called par or "stated" value. Unlike common stock, which floats on growth expectations, a preferred share is priced mostly on its dividend: as long as investors trust that dividend keeps getting paid, the share should trade close to par, the same way a bond trades close to its face value when nobody doubts the coupon.

Strategy's four preferred stock lines — STRF, STRC, STRK, and STRD — were all issued at $100 par. STRC ("Stretch") is the one built to hold that line most tightly: its dividend rate resets monthly toward whatever keeps its volume-weighted average price near $100. When it works, STRC trades like cash with a coupon attached. When confidence in the issuer wavers, no dividend formula fully offsets it — which is exactly what happened when STRC fell to a record discount in June 2026.

A discount to par is a real, tradeable signal. It means the market is demanding a lower price (and therefore a higher effective yield) to hold the stock — compensation for perceived risk that the dividend gets cut, suspended, or that the company's overall capital structure comes under strain. Getting back to par isn't just optics: it determines whether a company can keep issuing new preferred shares at $100 to raise fresh capital, or whether it has to sell them at a discount, which is more expensive and dilutes existing holders further.

IN A SENTENCE

"STRC is still trading in the high $80s, roughly 12% below the $100 par value it's engineered to hold."