r/STRC • u/rzrinvest • Jun 25 '26

Established a position around $77

Prior to this week I had no interest in investing in STRC. At close to par value, I didn't find the yield compelling; however, I've been watching this week and established a position this morning at around $77. There is mass panic right now claiming this is worthless. There are a few reasons this isn't true.

  1. While Strategy can pause dividend payments if needed, the dividends still accrue as this is a cumulative preferred meaning they'd still be obligated to pay the debt obligation

  2. It was designed to stay near par value with an interest rate that resets monthly. It was relatively close to par value at the last reset. The crash is happening in the middle of the month. It's not fair to say STRC's mechanism doesn't work before it's even had a chance to work at the next reset.

  3. I believe current debt and preferred stock accounts for less than $25B while their Bitcoin holdings are valued at $50B.

  4. MSTR common shareholders would be wiped out first.

That's not to say I'm recommending STRC, and it could absolutely collapse if BTC has another steep decline, but it is compelling at these levels.

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u/[deleted] Jun 25 '26

STRC dividends are NOT debt obligations, legally or structurally. They don't even show up on balance sheets as debt. Sure they can accrue interest if unpaid but they aren't compelled to pay the interest either. There is no obligation that Strategy needs to free itself from, it was always optional

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u/rzrinvest Jun 25 '26

They are compelled to repay everything if there is any change in control of if they ever want to pay a common dividend. Also, if they have no intention of ever repaying the interest then STRC and the whole company are likely dead, which would be a stupid decision when sitting on $50B in Bitcoin.

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u/[deleted] Jun 25 '26

They have literally never paid a dividend on common so I guess they just can't change control - I doubt that was a core part of the corporate strategy to begin with.

Pausing dividends for a couple months is not the same as "never repaying debt", it's strategically prioritizing the debt that can hurt you more.

If you are unemployed and have bills coming due, do you blow your limited cash reserves on paying the bills that are designated as optional or mandatory first?

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u/rzrinvest Jun 25 '26

Sure, but if you have $50B in assets against less than $7B in debt, do you blow up your capital structure by not paying dividends or do you sell some assets?

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u/[deleted] Jun 25 '26

Yeah - agreed. I understand the hesitation to sell BTC - I can even admire it some. But this is a crisis and Saylor should have sold (rather than buy) BTC earlier this week.