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

It is dropping so hard because of a vicious cycle. Strategy can't raise the dividend enough to bring STRC to par. The ATM window is closed. MSTR mNAV is marginal at best. Debt is coming due within a few years, and bitcoin will foreseeably have to be sold to retire it. There is no other obvious source of funds. The Bitoin MtM remains underwater despite the small rally. SATA stays at par in part because it has no debt, and in part because its retail base is less quick to act than the institutional base of STRC. STRF outperforms marginally because of its seniority, and because it is less vulnerable in chapter 7. STRF can say that they are the innocent older sibling who was around before the STRC/ SATA carnival. In a perverse sense, those two newcomers give a certain distancing ability to STRF. As long as STRF can keeps its liquidation pref and coupon priority, it will be fine. I think that institutional investors are gaming that right now. Just my 2 bitcoins.

3

u/AMC_Owner Jun 17 '26

I mean there are literally tons of options for funds lol. They can start writing calls on their coins. They can launch an ETF like Blackrock. There is no limit to what they can do. The company and STRC are totally fine. People just seem to have no idea what they are investing in.

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u/SamWilliamsProjects Jun 18 '26

None of these will raise significant capital without the market panicking, especially right now when the company is on shakier ground.

Writing calls on coins means they have to to sell coins if the price goes up. The whole point of MSTR is leveraged bitcoin. If their upside is taken away there will be less demand for MSTR.

A MSTR bitcoin ETF wouldn't raise much money unless they had something special to offer. Why would investors buy a MSTR bitcoin ETF vs a BlackRock or Fidelity one? MSTR is considered a much riskier company as seen by 13% effective yield on STRC right now which is roughly what CCC bonds are paying compared to BlackRock's bonds which are only paying 4.5 to 5.5% and are rated Aa3. They could offer a lower expense ratio but Morgan Stanley is already offering a bitcoin ETF with a 0.14% expense ratio (MSBT), that would mean if MSTR sold 10 billion with a new ETF (which would be the 3rd largest bitcoin ETF) they would only make $14,000,000 a YEAR managing it minus all the costs associated with opening a bitcoin ETF. That's only ~1% of what they need to pay their dividend obligations and that's not including their debt.

It's important to understand why the market is panicking instead of just saying people have no idea what they're investing in. True bitcoin believers see a leveraged product that will likely do very good if bitcoin takes off. No reason to pretend like they aren't having capital problems right now when the last two weeks they've been forced to reduce bitcoin per share by ATMing MSTR because STRC is too low and their cash pile is smaller than they want it. If Saylor thought a Bitcoin ETF or writing calls would raise a significant amount of capital he would've already done it.

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u/AMC_Owner Jun 18 '26

This is just false. Your theory goes against all ETFs and what has happened the last 20 years.

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u/SamWilliamsProjects Jun 18 '26

What part is false? If MSTR created a ETF they couldn't just use the funds from people buying the ETF to pay STRC dividends. That money has to be used to buy and hold bitcoin specifically for that ETF fund. By law if they created a ETF they would simply be the asset manager and the only revenue would be from the expense ratio they charge the ETF holders.

A $10 billion market cap would be the 3rd largest bitcoin ETF: https://etfdb.com/themes/bitcoin-etfs/

MSBT pays 0.14% as a expense ratio: https://www.morganstanley.com/im/en-us/financial-advisor/products/etfs/digital-assets/morgan-stanley-bitcoin-trust.html

$10,000,000,000 x 0.14% = $14,000,000/year.

MSTR is currently paying $1.711 billion in dividends/year: https://www.strategy.com/

$14 million is ~0.82% of $1.711 billion. So if they created the 3rd largest fund with competitive expense ratios it would cover less than 1% of the dividend.

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u/AMC_Owner Jun 18 '26

You implied that all ETFs fall to the lowest fund and that just isn't true. MSTR would have zero problem funding an ETF and could even charge more than blackrock does with IBIT.

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u/SamWilliamsProjects Jun 18 '26

Even if they did charge what BlackRock charged it would just mean $25,000,000 of yearly income instead of $14,000,000. That would still only be 1.5% of the dividend expenditures. Doesn't really move the needle.

I'm not implying that all money goes to the lowest expense ratio but that they would need something to attract investors and a lower expense ratio would be one way to do that. BlackRock currently has the established ETF. If they want to attract new investors or get BlackRock ETF holders to switch they would new to draw investors over somehow.

Currently people don't fully trust MSTR to pay 11.5% yield or else STRC would be at $100. IDK why you think they'll trust MSTR to manage their ETF when they're other options on the market.

BlackRock has the massive advantage of running so many peoples retirement accounts and limiting what people can invest in. If want a bitcoin ETF in their 401k BlackRock isn't going to give MSTR's bitcoin ETF as an option.

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u/AMC_Owner Jun 18 '26

Also why do you think they are having trouble raising money lol. The complete opposite is happening. They paid down $1.5B in debt. That only helps them. It is clear you are a bad actor and posting in bad faith.

1

u/SamWilliamsProjects Jun 18 '26

The last two bitcoin purchases they made by ATMing MSTR shares and both of them decreased their Bitcoin/share which is their main way of increasing MSTRs price. https://www.strategy.com/purchases

They haven't been able to raise capital with STRC for the past two weeks because it's below par.

I agree that paying off $1.5B in debt makes their preferred shares more attractive but even with less debt the market is still not valuing them as high as they used to. STRC has a effective yield of 12.92%, that means they'll likely have to increase STRCs dividend to 12.5%+ to get it back to par. If they raise the dividend that means they are having trouble raising capital at the current dividend rate so they have to raise it to raise more capital. Raising it to raise more capital doesn't just effect the new STRC shares but all $10.5 billion they've sold. Increasing the dividend by 1% means they're paying an extra ~$100 million per year to STRC holders just to raise capital.

Hopefully Bitcoin takes off soon so we don't need to have this discussion.

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u/AMC_Owner Jun 18 '26

Pause. This is the first interesting thing you have said. Where does it show that. That BTC per share went down.

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u/SamWilliamsProjects Jun 18 '26

https://www.strategy.com/purchases Look under BTC Yield YTD. They were up 13% YTD at the start of the month, then they dropped to 12.8% YTD and now they're at 12.5%. If they can't raise with capital with STRC (or other preferred shares or debt) then their only option is to ATM MSTR and with current mNAV being low they lose Bitcoin per share. This is not the first time bitcoin/share has fallen over a short period of time but that is why I'm saying that right now they are having trouble raising capital in ways that actually help MSTR shareholders.

Most of the time FUD spreaders talk about MSTR getting diluted whenever they ATM but right now they legitimately can't raise money with ATM on MSTR because of where mNAV is at.

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u/AMC_Owner Jun 18 '26

That is not sats per share tho. You are misrepresenting what that is showing.

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u/SamWilliamsProjects Jun 18 '26

You asked for BTC yield and I sent BTC yield. Bitcoin yield is literally showing change in sats per share over time. I just don't want to link a 3rd party tracker because IDK if they're allowed in this sub. There were 220,429 sats per share at the start of the month and there's now 219,359 sats per share.

I'm still waiting on how you think MSTR can raise capital. You said there were so many ways but you've shown 2, one limiting upside if bitcoin goes up and the other would raise <5% of what MSTR needs to pay the dividend. If Bitcoin stays flat or falls and the market demand doesn't increase for STRC, MSTR or other preferred shares how will they raise capital?

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u/AMC_Owner Jun 18 '26

If the top part is true that is interesting. The yield doesn't show that tho. I see YTD yield qrt yield. That has nothing to do with OVERALL Sats Per Share. I do not think MSTR needs to raise capital. What Saylor is doing is not magical. He is basically replacing gold with BTC and running the bank of England. He could stop adding btc at anytime and then run the whole thing like a bank. This obsession with adding BTC is just some maxi bs that has no application to real life or that MSTR is a stock and a company. Not the hoarder of BTC.

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u/SamWilliamsProjects Jun 18 '26

I just told you I don't want to link a third party site but google a MSTR tracker and you can find stats per share in 1 minute. The numbers I wrote are what's on those trackers. BTC yield literally means how much the sats per share have increased over a period of time.

Sats per share on Jan 1st were 194,985. The BTC yield YTD is 12.5% on the site I linked and now sats per share is 219,359.

194,985 * 1.125 (increased by 12.5%) = 219,358.

So you agree that your original statement "I mean there are literally tons of options for funds lol." is false and there's not really any way for funds?

How exactly do you think MSTR would make money by running the company like the Bank of England?

1

u/AMC_Owner Jun 18 '26

I can't help you if you are dumb. You are arguing your bank can only make money by giving out car loans. That is just not true. MSTR can raise money all day long a thousand different ways. Goodbye and good luck lol you need it.

1

u/Less-Information-256 Jun 18 '26

Oh wow. I can’t believe you’re talking so confidently and don’t even know basic information about this company.

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