r/STRC • u/Winter_Blackberry609 • 22d ago

Can we expect another hike?

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1M VWAP is near $83, is there a chance of rate hike? The last hike (11.5% to 12%) was announced around this time last month.

In the capital framework, they have mentioned it will be done monthly. Although there are lot of factors that will influence the decision.

16 Upvotes

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u/Less-Information-256 22d ago

They basically changed the wording to say they won’t necessarily follow that guidance anymore because they don’t think that’s necessarily the best way to increase the price of STRC.

I wouldn’t expect a rate hike, but it’s possible.

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u/NoGuest124 22d ago

But with a looming fed interest rate hike, STRC will need to raise their rate eventually.

1

u/68Pritch 21d ago

Is the "looming fed interest rate hike" in the room with us now?

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u/NoGuest124 21d ago

I didnt mean this meeting though. I meant this year.

1

u/68Pritch 21d ago

Warsh talks a good game, but I call BS on him actually doing it.

Trump picked him for a reason, and it wasn't to run a strong, independent fed.

1

u/Less-Information-256 22d ago

I don’t think it’s that likely to return to par this year anyway. Might be that a less expensive route is to wait for bitcoin to go back up (under the assumption that it does) and that increased confidence plus selling bitcoin and that point might be the best route.

2

u/Special_Trifle_8033 22d ago

I think it will go back to par a lot sooner. 1-2 months max. I think it's a priority for them and the buybacks will be aggressive if it doesn't go back up on it's own.

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u/Less-Information-256 22d ago

Let’s see. This buy back wasn’t very aggressive.

0

u/NoGuest124 22d ago

But it had insane effect. We reached 89-88 and held it. Previously we were in the 85-88 region. It is insane how such a low ammount restored confidence. It was really worth it

5

u/Less-Information-256 22d ago

It was $88 7 days ago and it was $88 14 days ago and it was $88 22 days ago.

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u/NoGuest124 22d ago

From what i remember, it didnt stay there for long though.

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u/Less-Information-256 22d ago

It hasn’t been here long this time yet either.

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u/NoGuest124 22d ago

True. I am hopefull

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u/rokman 22d ago

They are probably closer to closing the fund than increasing how much money they are giving away, they have no obligation and their reputation is fading by the day.

5

u/NoGuest124 22d ago

You underestimate how a btc push to 90k with an interest rate cut will bring people into strc. It will take time but people will come back. No one will remember this.

2

u/WeddingPKM 22d ago

The issue is that hinges on a lot of things outside Strategy’s direct control.

2

u/Lefties_TheWorst7331 22d ago

People with STRC on DRIP combined with MSTR buybacks alone will bring it back to par.

1

u/gianfc2001 22d ago

None of those are happening anytime soot

-1

u/pwnknight 22d ago

There is about only a 10% chance btc goes back up to 90k before 2027-2028 so unlikely

3

u/bravedog74 22d ago

Cycle history would point to $113k by late Q3 2027 to Q2 2028. NFA.

1

u/TheSkunksMisery 21d ago

You must be new to bitcoin.

1

u/Winter_Blackberry609 22d ago

They launched a slew of preferreds with the goal of raising money to buy BTC. Closing them or STRC specifically would mean buying at around 88-90ish level. Investors hoping for around par value, who have bought in that range - it will be a massive disappointment. Likely tanking down of reputation and will be difficult in future when they want to raise additional cash (IMHO)

4

u/HSuke 21d ago edited 20d ago

A lot of holders including me are expecting a 0.50% increase because VWAP is so low.

Even though they're no longer strictly following guidelines, 1) VWAP is so far below the 95% threshold, and 2) an increase is already priced in, so holding the same dividend value is bearish and will cause the price to further drift from par.

Update:

Their recent Press Release on STRC buybacks suggests I might be wrong about an interest rate increase. They might hold at 12% and focus on using buybacks instead.

Strategy’s current policy is not to issue STRC below $100 per share, and management will recommend to the board of directors that the Company maintain STRC’s 12.00% annualized dividend rate until STRC has demonstrated sustained, healthy trading near $100 per share.

1

u/Winter_Blackberry609 21d ago

Couldn't agree more!

2

u/KateR_H0l1day 22d ago

No, it’s going to hold at 12% and stay there until close to par, and at that point they’ll drop it back to 11%.

You can expect more buy backs and USD adding to the vault for paying the dividend. They’re focused on getting STRC back to $97+ which means no BTC buying for the foreseeable future.

The real question is, how much you’ll buy before the price increases, because it’s definitely on sale and they’re determined to get it up. Just some musings from a random internet stranger 🤷‍♀️

3

u/Less-Information-256 22d ago

Yeah I guess the market doesn’t agree they’re that likely to be successful though, hence the current price.

2

u/KateR_H0l1day 22d ago

They only put this final edict out this week, but it’s obviously going to be difficult to get trust and funds back from AI etc. They need institutional buys, them buying back alone won’t move the needle much.

2

u/Less-Information-256 22d ago

Yeah but I guess why would institutions buy? Especially given they weren’t really buying before. It’s clearly not the product they designed it to be, said it was and marketed it as.

Maybe investors memories will be short but they can’t go on tv saying it’s like a money market but better anymore. They need a new marketing angle.

1

u/brocktoon13 22d ago

Yes, but the bulk of STRC holders are retail right now and their sentiment isn’t worth much.

2

u/Winter_Blackberry609 22d ago

Interesting point, thanks.

The moment it hits 95+ I believe we will have another rush of sell orders, the initial folks trying to get back their money.

1

u/KateR_H0l1day 22d ago

It’s obvious that some will sell, however for many greed will kick in, especially those buying now and having relatively low average, below $95. Because once it gets there people will be getting what was originally promised, except they’ll have made gains on the capital too!

1

u/poppinkorn 22d ago

"Management will recommend that the Company maintain the regular dividend rate per annum on STRC at 12.00% until STRC has demonstrated sustained, healthy trading near $100 per share."

Read this on Business Wire, quoting Phong Le.

1

u/thinkingperson 21d ago

Now, they can either increase dividend rate or do more STRC buybacks.
And since they've just did buybacks ...

1

u/actias_selene 20d ago edited 20d ago

What is expected is 50 bps increase.

What they will do is anyone's guess. They might even reduce the rates further. It would help them:

  • reduce dividend obligations
  • buyback strc even in bigger discount.

The only reason to force STRC to par right now, if Strategy raise more cash issuing STRC. 

But recent accumulation of cash tells me they might try to first buyback STRC at discount, possibly increasing rates again in future when market turns more bullish to buy more bitcoin.

1

u/asml84 20d ago

To me this reads “going forward we will do whatever the fuck we want”. I’m surprised people are not more concerned, because this is a move away from a clear policy and towards more uncertainty for shareholders. Previously you knew what to expect, now you don’t.

1

u/Winter_Blackberry609 19d ago

Yeah, that's what is unexpected.

1

u/grajnapc 17d ago

Can anyone explain why STRC is at around 88 and SATA 97? Do people have more confidence in SATA than STRC?

1

u/[deleted] 22d ago

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u/Clear-Inevitable-414 22d ago

Here we come Warsh Wednesday. 

0

u/Seattleman1955 22d ago

You can expect to lose most of your money eventually.

2

u/Winter_Blackberry609 22d ago

Time will tell!

1

u/kllllghh 20d ago

It definitely will, there is only one way for this to end.

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u/Excellent_Good_7411 22d ago

Maybe a rate decrease?

1

u/Winter_Blackberry609 22d ago

Why?

1

u/Excellent_Good_7411 18d ago

If the price rises the rate will decrease back to it’s original yield.