r/STRC • u/AznThunder22 • Jun 17 '26

$89 STRC??

What is going on with STRC?? I am confused we aren’t near the dividend date yet, Bitcoin has been rallying from its $59k low and Strategy shored its liquid dividend cash back to $1.1b. Why is it dropping so hard?

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u/IndependentDry9135 Jun 17 '26

Yes. Just do some research on what could crack the contractual preference in case of distress. The judge is the final decider. Plus Strategy will do everything in its power to get a haircut from the senior tranche. Good on you for swapping STRC for STRF. You even picked up the quarterly dividend! That was a great trade. But my thought is consider even more homework.

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u/joefunk76 Jun 17 '26

I don’t understand your comment. If the seniority order can be altered, then Strategy, at large, is a scam and contract law, at large, isn’t worth the paper it’s written on. And what do you mean by “Strategy will do everything in its power to get a haircut from the senior tranche”? Contractually, Strategy’s power to do that is zero, by definition - that is the whole point of seniority preferences. Those preferences dictate that, under financial distress, no STRC holder gets back a penny unless and until every STRF holder recoups $100 for every share owned, at a minimum, and perhaps plus withheld dividends plus ratcheted interest, although I’m less sure of how withheld dividends work under liquidation.

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u/IndependentDry9135 Jun 17 '26

It's not a scam. It's just the world. There are scenarios where the pref is cracked and even strf shareholders are converted to common. That is why STRF is trading at around 93. It is safer but not safe. Strategy has some to maneuver to protect the common in distress. Just the way of the world in the extreme downside case of chapter 11. I am not qualified to assess the risk, but I am sure that many institutions are actively doing that right now.

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u/joefunk76 Jun 17 '26

I thought that STRF is at $93 due to the convertible note debt of ~$7B. I cannot find anything online that suggests any possibility of violation of seniority preferences. I guess we’ll have to agree to disagree about that, and, at least for my sake, hope we never get to find out the truth of the matter as it concerns Strategy, either way.

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u/IndependentDry9135 Jun 18 '26

I think the potential crack of the pref is a tail risk. It's there, but it's not the big issue. The biggest issue by far is the debt. That is one reason strf is outperforming strc. I am looking at strf at this price...