Strategy’s preferred stock, STRC, has surged to become the largest holding in three prominent U.S. preferred stock ETFs, even though its market price trades about 13% below its $100 par value. Institutional investors now control a growing share of STRC, highlighting a shift in ownership dynamics.
Institutional Investors Boost STRC Holdings
Co-founder Michael Saylor revealed on July 24 that STRC is the biggest position in BlackRock’s iShares Preferred and Income Securities ETF (PFF), Virtus InfraCap’s U.S. Preferred Stock ETF (PFFA), and VanEck’s Preferred Securities ex Financials ETF (PFXF). Together, these ETFs hold $756 million in STRC, making it the largest single security across all three funds.
Despite this institutional interest, STRC’s price closed at $86.89 on the announcement day, hovering well below its intended $100 par level. The price rise of 2.29% that day brought its post-market value to $87.14 but still left the stock discounted by over 13%.
This gap impacts Strategy’s ability to fund Bitcoin acquisitions through STRC issuance. The company plans to issue more shares only when prices return near or above par, as raising capital with discounted shares dilutes the economics of their intended Bitcoin purchases.
Strategy’s CEO Phong Le reported a 105% increase in the average institutional STRC position, now around $3.5 million between March and July. Meanwhile, retail ownership has dropped from 78% to 71%, signaling a major shift in investor composition.
STRC’s rise in institutional portfolios shows growing acceptance of what Strategy brands as "digital credit" products. However, some market watchers, including Peter Schiff, suggest that institutional buying might be short-term or paired trades rather than outright bullish bets.
STRC’s inclusion in these leading ETFs gives investors indirect exposure to Strategy’s preferred stock, alongside established U.S. company securities. This development marks a notable milestone for Strategy’s market presence.
