Strive CEO Matt Cole declared Thursday the most difficult day in digital credit history as preferred equity products SATA and STRC suffered record price declines. Both assets, designed to trade near $100 par value, closed significantly lower at $97.71 and $88.59 respectively.
Cole attributes the sell-off to a leverage liquidation event rather than deteriorating credit fundamentals. Investors seeking yield often borrow against these stable instruments, creating vulnerability when positions unwind. Strive Chief Risk Officer Jeff Walton confirmed massive trading volumes suggest a leverage flush occurred while underlying bids remained intact.
Market data supports this assessment. SATA and STRC recorded their second and fourth-largest trading days with $153 million and $941 million in volume. These figures vastly exceed typical activity for larger preferred equities from institutions like JPMorgan and BlackRock.
Despite the technical explanation, fundamental concerns persist regarding Strategy’s dividend obligations. The firm recently sold Bitcoin to bolster cash reserves, signaling a potential shift in capital allocation strategy. This uncertainty continues to weigh on investor sentiment alongside broader market volatility.
Both Strive and Strategy common shares also declined Thursday. MSTR fell 3.46% while ASST dropped 3.8%, extending monthly losses as markets prepared for the Juneteenth holiday closure.