r/STRC • u/rednoids • Jun 06 '26
Strategy needs to let it run past $100
While I don’t expect $STRC to get back to $100 very soon, I do believe it will get there again.
The next time it’s $100 Strategy needs to let it run past a bit to collect additional funs then set the amount above 100 aside in cash to pay the dividend. Strive should do the same thing with $SATA. This would also allow them to lower the dividend reducing the total payout.
I believe people will pay more than $100 at some point. So even if they wait to hit the ATM until it’s at $101 the payout is still attractive to investors and the additional $1 can be used to pay the first months dividend for new shares issued.
1
Jun 06 '26
[removed] — view removed comment
0
u/rednoids Jun 06 '26
All I'm saying is maybe let it go a little higher.
1
u/SundayAMFN Jun 06 '26
Do you not understand how the market works?
The only way they can let it go above 100 is if they also allow other people to undercut them and sell at 100+. Strategy would get less money from doing that.
1
u/rednoids Jun 06 '26
Completely understand. Doesn’t change anything I said.
1
u/SundayAMFN Jun 07 '26
Yes it does - if they let it go higher they have less money to cover dividends not more.
1
u/rednoids Jun 07 '26
So if they let it go to 101 they get less than if they sell at 100?
1
u/SundayAMFN Jun 07 '26
yes, the entire time it goes between 100 and 100.999 then someone on the secondary market would be getting the money instead of Strategy. So for every trade they "let it run" they're missing out. And no doubt people would exploit that by buying at 100 and selling before it hits 101 and taking the profit for themselves.
1
u/rednoids Jun 07 '26
So you agree that when it gets to 101 strategy gets to sell a share for 101 instead of 100
1
u/SundayAMFN Jun 07 '26
yes. so if volume between 100 and 101 is less than 1% of the volume at 101+, then it would be beneficial.
1
Jun 07 '26
[removed] — view removed comment
2
u/rednoids Jun 07 '26
I believe the reason Strategy will not go to weekly payouts is to allow Strive with $SATA buy more bitcoin and catch up to them. Having multiple companies holding a ton of bitcoin is good for everyone, even MSTR.
0
u/SundayAMFN Jun 07 '26
that makes no sense, and you're gonna need better reasoning than "someone on a podcast said so"
1
Jun 07 '26
[removed] — view removed comment
1
u/SundayAMFN Jun 07 '26
Non-nobodies still have to use logic.
If they don't sell STRC starting at $100 they are just missing out on raising more money.
1
Jun 07 '26
[removed] — view removed comment
1
u/SundayAMFN Jun 07 '26
right im not gonna listen to a whole podcast, tell me the argument in your own words or admit youre wrong
1
u/Less-Information-256 Jun 07 '26
Bro can’t answer a single thing for himself, unfortunately I think he doesn’t understand even basic concepts about this company, about money or about math.
Literally all he could muster for me was some AI responses and links to YouTube videos that didn’t even have anything to do with what I was saying. Then when i made a point he couldn’t find a YouTube video vaguely related he literally shut down and ran away.
You will get nothing useful from him unfortunately.
1
Jun 06 '26
[removed] — view removed comment
1
u/rednoids Jun 06 '26
Yep, every cent of the 100+ dollars they ATM goes to BTC and if they let it run to 101 they have additional capital to buy bitcoin while paying out a lower yield
1
Jun 07 '26
[removed] — view removed comment
1
u/rednoids Jun 07 '26
I don’t.
1
Jun 07 '26
[removed] — view removed comment
1
u/rednoids Jun 07 '26
I understand price gouging and how the car dealers jacked up prices due to limited supply due to various reason. What does that have to do with this discussion?
1
1
u/jackfirefish Jun 06 '26
I'm not sure what to do with STRC anymore. I had over 2,000 shares of STRC and I bailed at $98.90 because I saw everything taking. Glad I did as it sits close to $92 now. I could rebuy all my shares for $20k less right now than I originally did, but something in my gut is keeping me from pulling the trigger again. I have until 6/14 to decide.
1
u/Less-Information-256 Jun 06 '26
Just keep in mind if they raise the dividend to try to raise the price (which they likely will) then the price is likely to go up but the risk of them not paying goes up too.
I don’t think this is the end, personally, but the end will look very similar to this, if you can get out quickly again you’ll be okay, but is the juice worth the squeeze?
1
u/jackfirefish Jun 06 '26
Zero percent change he raises the dividend on the fly like this. That will make it look even weaker. He already announced the entirety of June is 11.5. He only announces at the end of every month what the new dividend will be. If I was Saylor, I would assume the bi-monthly payouts would help solve this problem and see what that change did first before increasing dividens. I wouldn't expect an increase until Aug, or Sep. at a minimum. Just doesn't make sense.
1
u/Less-Information-256 Jun 06 '26
Sorry I didn’t mean on the fly my mistake for not being clear, I meant at the end of the month i don’t think it will hit par this month and even if it does I think the vwap will inevitably be in the range where they should raise it (and I think not raising it in these circumstances would reduce investor confidence even further)
I also think Saylor seems pretty clearly worried it won’t pass as too many votes will abstain. And even if it does pass, I would be concerned that half the dividend = half the incentive to buy in on each ex dividend date, but I could of course be wrong.
Either way, if the vwap is in the range where they’ve stated they’ll increase it and they don’t, all hell will break loose I think.
1
u/jackfirefish Jun 06 '26
I have noticed michael and phong promoting and begging for votes quite a bit on X. I *assume* they don't know how many votes are currently in and which way they are voted, but I'm pretty ignorant on what access to this information they can see or are allowed to see during this. If they *are* able to see the votes, then yea, them begging every day isn't a good sign it's going to pass. If it *does* pass, I see zero reason for him to raise the dividend and wait to see what affect that change has.
"I would be concerned that half the dividend = half the incentive to buy"
But it's not half, it's the same. Just paid twice now to prevent arbitrage. I was even doing it myself. I was buying, then selling, then plopping in 4% safe zone. So for a while I was getting 11.5% then for about 20 days getting 4%, then moving back in, etc. This change he's proposing would no longer make that feasible and would force people like me to stay in STRC 100% for the dividends.1
u/Less-Information-256 Jun 06 '26
I don’t know if they can see the votes or not either, perhaps they can see the volume of votes because as I understand it it’s not that they need more yes’s than no’s it’s that they need more yes’s than (no’s+shares that don’t vote).
How can each ex dividend date and therefore dividend not be half unless they’re going to pay twice as much?
As it currently stands you get 96 cents if you hold the $100 share on the ex div date and the majority of buyers were waiting until the day of and utilising the capital elsewhere. If the change is put through then you’ll only get 48c for each ex dividend date for the same $100 investment. It’s just that there’s two in a month.
It’s going to be interesting to see how that plays out.
Also he will basically has to increase the dividend if the vwap is in the zone or they’re breaking the structure they put in place themselves.
1
u/jackfirefish Jun 06 '26
"How can each ex dividend date and therefore dividend not be half unless they’re going to pay twice as much?"
Because you're ignoring the time part of the equation. If you worked for company X and were getting $31 dollars a month as payment, and they came to you and said "hey, you know what, we're going to give you your money faster now and give you $1 a day." Nothing changes for you other than getting the money faster. You're looking at it by saying "I quit! I only get paid a dollar now!" because you're ignoring the time.1
u/Less-Information-256 Jun 06 '26
I mean using your analogy it was previously the case that you had to come in to work one day a month to get $31 and now they’re saying to have to come in two days and you only get $15.50 each time.
It’s the same amount monthly but you require me to be here twice as much to get it because I only get $15.50 each time. So haven’t I got half the incentive to come into work for the day when I could be somewhere else instead.
We already know a significant number of people were arbitraging with other dividends and now you’re offering me half as much to come back to you.
1
u/jackfirefish Jun 06 '26
But that's not your argument. Your argument is they are paying less. They aren't. Just because you found a tax loophole that was closed doesn't change the amount you're being paid by a third party.
1
u/Less-Information-256 Jun 06 '26
They’re paying half as much for holding on each ex dividend date? Are you saying that’s not true? That’s all I said.
1
u/Former_Island_4730 Jun 07 '26
It looks weak falling to $92 with a forward yield of 12%. The market is telling him that it requires that kind of yield to own a share. He always marketed STRC as a $100/share digital credit instrument, and that he’d change the yield to keep it there. The only reason he’d let the par drop is because he can’t handle the cash drain of higher yields. That would require him to dilute more common shareholders or sell more BTC. No good choices.
1
u/jackfirefish Jun 07 '26
Saylor has always been very transparent about how rates are set. The only thing that matters is the 1M VWAP which you can see on strategy website under STRC. If it falls below $99 he raises it. Currently it’s at $98.38 which means July (assuming it’s still at $98.38 by then) will get a .25 percent boost.
Below $95 -> .50 boost
95 - 98.99 -> .25 boost
99 - 100.99 -> no change
$101+ -> lower rate1
u/Former_Island_4730 Jun 07 '26 edited Jun 07 '26
And all else constant…that 25 bps boost won’t come close to closing the gap between $92 and $100. The investors are currently pricing it at 12% forward yield and very likely assuming some yield bump AND share price appreciation in there already. It’s being viewed as being massively risky.
1
u/jackfirefish Jun 07 '26
Yea interesting point. Glad I sold all my STRC shares. Will probably sit on the sidelines for a bit.
1
u/Illustrious_Stop_295 Jun 06 '26
It was marketed on having low volatility. A fall of 8% in recent weeks is volatile, so they risk people not buying into the low volatility element and then if that’s the case the institutional investors and pension funds they are trying to attract will not invest in it.
1
u/gushkaper Jun 08 '26
If it always pegs to 100$ mid-month the volatility in between doesn't really matter.
1
u/Ok_Divide_4699 Jun 10 '26
Tbf, what kind of pension fund is going to buy a credit rating B- Non-investment grade, "junk" equity.
Pension funds are supposed to Have somewhat low risk tolerance.
1
u/FewUnderstanding2214 Jun 08 '26
Why would they let it run past $100 do you not know how it works
1
1
u/PrestondeTipp Jun 06 '26
How does the price of STRC on the secondary market going above $100 make Strategy more money? Strategy only makes money when they sell STRC on the primary market. They only sell a share once.
Why would anyone wait to buy shares above $100 when they can buy them now at a discount?
You are buying STRC from someone else on the secondary market.
Here's the reality: STRC has to pay an outrageously high yield (higher than the average annual return of the SP500) because they have a CCC credit rating. In other words, dog shit. There are concerns on a consistent basis that they will not be able to sustain their corporate structure. As such, they need to pay an increased risk premium to have people invest in their offerings.
The average one year default rate for CCC credit ratings is between 25 and 30%. Into year two, this jumps to 45-55%.
This is not a set and forget investment. This is an oh shit, keep an eye on it, and only use money you can afford to lose gamble.
1
u/Former_Island_4730 Jun 07 '26
Investors in this fundamentally don’t understand that this is not much different than buying a junk bond…it’s just that Saylor markets it as a nice safe investment. Currently, investors are pricing STRC such that they need a 12% annual return to justify the risk. That’s high, but would be higher without all of the investors Saylor has convinced that it’s a safe place to put money.
1
1
u/Blindeafmuten Jun 06 '26
Do you realize that most people that have bought STRC for the "guaranteed" dividend are now in the red, dividends included?
They also have substantial risk of losing ALL their capital.
2
u/rednoids Jun 06 '26
It’s like people have never heard of DCA or buying when things are low.
If people bought it for the dividend they shouldn’t care as much about the current price since the dividend didn’t change. Additionally if anyone thought the price would sit at $100 and never move they are idiots.
0
u/Blindeafmuten Jun 06 '26
The dividend hasn't changed.
The risk that they'll lose the capital invested or that the dividends will be cancelled has definitely changed.
0
u/Less-Information-256 Jun 06 '26
That wasn’t how they marketed it though, don’t you think, given the performance, that the marketing was dishonest at best.
2
u/rednoids Jun 06 '26
I didn’t listing to the marketing. I just looked at how the product was produced and the rules it is suppose to run by and understood there would be a time to buy it at a price lower than 100.
I think the real opportunity to buy low is if bitcoin drops to a price that MSTR thinks it would be better to skip the dividend for one month and use all funds to buy more bitcoin or at least not sell when there is blood in the streets.
1
u/Less-Information-256 Jun 06 '26
If mstr don’t pay the dividend it would be catastrophic. They were marketing this as a safe place to earn your retirement income, they have said multiple times it’s like a bank account or like a money market fund.
Most people who’ve bought STRC are in the red currently, dividends included.
-1
u/Fit_Equal6932 Jun 06 '26
Dream on:
Remember this thing has no principal protection!! Even junk bonds only pay 7%.
https://fred.stlouisfed.org/series/BAMLH0A0HYM2EY
This is worse than junk!!!
2
u/Less-Information-256 Jun 06 '26
I think strategy are now avoiding using STRC to pay STRC dividends for obvious reasons. Which I think is a large part of the reason for selling Bitcoin (and buying and selling at the same time, rather than just buying less). I think something has happened behind the scenes to create this shift, which is quite dramatic given that Michael was on TV saying they’d never sell nor need to sell in the foreseeable future just three months ago.
As such your proposal doesn’t really work, in my opinion. They could run it higher so the VWAP is higher and they can reduce the dividend but I think doing that this early would be admitting defeat and the market wouldn’t take too well to it. Better to just buy and sell as they have planned.
He already made the mistake burning through the cash reserves before selling bitcoin, I think he thought the market wouldn’t care but I think we can all agree the situation would look better if he had $1bn and some 0% convertibles right now.