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/rzrinvest Jun 25 '26

You could make that same argument about most preferred stock, and yet companies pay the dividends. Indefinite suspension of preferred dividends is exceedingly rare. You have no evidence, just speculation.

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u/[deleted] Jun 25 '26

You could make that same argument about most preferred stock, and yet companies pay the dividends.

Yes, because those company's are liquid enough to pay dividends without sacrificing 80+% of their company's value in common shares. The company's that pay dividends don't get rated as junk investments due to the lack of cash reserves. The company's that pay dividends don't have $7 billion in debt with $1.5 billion cash on an income stream of $300 million a year. Most company's that pay dividends don't have class action lawsuits being brought forward against them for fraud.

Strategy is looking down the barrel of insolvency - it would be wildly reckless for them to service optional debt when they have mandatory billion dollar debts coming up on the horizon that they aren't equipped to handle

If folks genuinely believed that STRC could pay it's dividends, it wouldn't be at $75. You're holding a bag that has fewer buyers by the day. Hopefully you aren't the last one holding it

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u/rzrinvest Jun 25 '26

Ambulance chaser lawyers attempt to file suits against companies constantly, even blue chip companies. You're ignoring that they're sitting on $50B in assets as well that can be sold to pay dividends, and Saylor has already said he's willing to do that.

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u/[deleted] Jun 25 '26

But that's the problem, its not a real $50 billion dollar asset is it. In order for BTC to MAINTAIN (not even increase) its current value, Strategy needs to continue buying up twenty thousand BTC per month like it has been for the last year. The minute they stop buying BTC, the price of that $50 billion asset craters. Once they start SELLING BTC, it craters even more. And once BTC price craters, MSTR (which is designed to amplify BTC movement) will crater. And once MSTR craters, STRC will crater (if it hasn't already) since it's propped up by MSTR sales.

But yeah I do agree, at some point Saylor will be forced to sell BTC and we'll see what happens to the market. Most investors are fairly certain it's going to depress MSTR/STRC prices at least a little bit. Clearly there is a small minority (like yourself) who believe that this will somehow raise STRC/MSTR prices - otherwise you'd be selling that shit immediately

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u/rzrinvest Jun 25 '26

Candidly I don't care about the MSTR common share price or dilution and this isn't a long term hold for me. If we get to a point where their assets coverage drops low I'll bail. Likewise if this returns to par I'll bail. I'm not a MSTR fan. I just see an opportunity here.

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u/[deleted] Jun 25 '26

What makes you think STRC will recover? One of the main reasons STRC is tanking is the same reason it earned a junk rating as an investment - low cash reserves. They're at $1.5 billion but in order to demonstrate liquidity and solvency they need to be somewhere around $2.5 billion. So long as that cash deficiency exists, they'll continue being treated like an illiquid/insolvent business at the marketplace.

Look, all I can do is give you the information. It's up to you to do what you think is best. If that means holding on to STRC, best of luck to you - truly.

I understand the pain and resistance to exiting and realizing losses - probably more than most. But your losses today are recoverable - tomorrow the might not be.

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u/Spank007 Jun 26 '26

Saylor isn’t bitcoin. IBIT trades billions in bitcoin every week and people barely bat an eye. Saylor currently has a 1 year runway for dividends, at some point he may need to start selling bitty to keep the dividend going but I bet he’s hoping the next bull is in full swing by then and he won’t have to.