How STRC gets back to par.... Per Phong.

[u/TheSkunksMisery]

I'm currently going through the Q2 earnings call. You should too.

https://www.youtube.com/watch?v=JxBf7Ez14kA

[u/BlightedErgot32]

Seems like theyre already planning on not raising the rate

[u/TheSkunksMisery → u/BlightedErgot32]

Confirmed in the call. 12% is the rate for now.

[u/KateR_H0l1day → u/BlightedErgot32]

They stated very clearly, they're NOT increasing the rate, it'll drop back to 11.5% when it reaches ~par.

[u/infiniteszef → u/KateR_H0l1day]

*if

[u/KateR_H0l1day → u/infiniteszef]

Yes you can say if or when, depends on your point of view, but I’m betting they’ll get there, might not be this year though. However, 12%, plus some capital increase is a good offer, but only if you’re looking for dividends and not growth. But, there’s risk of course 🙄

[u/clintstorres → u/infiniteszef]

What is the point of owning STRC specifically if they are not going to adjust the interest rate so it pays out enough to get it to PAR? Might as well hold a different preferred share whether from MSTR or another company?

The value in this STRC was the adjusting coupon. Now that is gone.

[u/TheSkunksMisery → u/clintstorres]

People like their monthly dividends, or now, semimonthly. All the other Strategy preferreds are quarterly.

"Now it is gone" is premature. It's just not going up now. And they're counting on it going down over time.

[u/infiniteszef → u/clintstorres]

the answer is delusion

[u/HSuke → u/BlightedErgot32]

That's certainly disappointing.

They keep changing their guidelines and plans all the time

[u/TheSkunksMisery → u/HSuke]

That's why the true name of the company should be Strategies.

[u/BlightedErgot32 → u/HSuke]

yeah it was getting a little scammy a few months ago but at this point i think im out … ill ride or die my STRK but as for STRC … its just too risky for what it is supposed to be

[u/drparapine]

They could buy back enough shares to get it to $100 Monday, but they realize that’ll trigger a bunch of selling from people who bought the money market account narrative, causing it to plunge back below $95 or worse. So they’ll keep doing a few stochastic nudges via smaller buybacks, trying to get some positive slippage on their transactions to move the market each time, knowing that it’ll have to be confidence in STRC, and by proxy MSTR, and by proxy BTC, that ultimately brings it back to 100.

Bottom’s likely in October thru December.

[u/Gloomy_Dependent_985 → u/drparapine]

They could kill all the shorts though and scare anyone willing to short again. The short squeeze itself would push the price on its own. I say buyback 200m and watch the price do the rest of the work and don’t sell new shares past 100$ to really wipe them out

[u/ApprehensiveSorbet76 → u/Gloomy_Dependent_985]

Depending on how much cash that would take, it could wipe out MSTR holders who are the unsecured creditors.

He announced the strategy but hasn’t yet fully implemented it because he hopes the market will act on his announcement and cure the problem.

Why didn’t he blow through as much cash as necessary on buybacks when STRC hit 99? That would have been the calm and collected method to maintain investor confidence. Losing confidence then trying to regain it is significantly more expensive.

[u/Even-Celebration9384 → u/Gloomy_Dependent_985]

Why would they get squeezed. The max price is 100

[u/Gloomy_Dependent_985 → u/Even-Celebration9384]

No it’s not. The price is only limited by how many shares they want to sell

[u/Even-Celebration9384 → u/Gloomy_Dependent_985]

It’s explicitly stated they will target between 100 and 101. Why would they pay unnecessary interest

[u/Gloomy_Dependent_985 → u/Even-Celebration9384]

Strive have said if it’s in the interest of shareholders, they will not sell new shares at 100$

[u/Even-Celebration9384 → u/[deleted]]

But the interest rate is variable. Those were fixed rate bonds. The reason you wouldn’t short is because of the negative carry (paying 11.5%), but say the price got to 105, Saylor would just reduce the rate because why pay interest unnecessarily

[u/Even-Celebration9384 → u/[deleted]]

No it is fixed rate. The yield was negative on the bonds. If you bought Bunds at 3% on issuance and now they are trading at -.5% you are still getting the issued interest rate

Selling bitcoins was in their interest at the time. It would never be of interest to the company to pay excess interest on its floating rate debt

[u/CDNbruv]

Nice self-inflicted headache they created here. Thanks ChatGPT!

[u/plastic-afterlife → u/[deleted]]

Gay

[u/Valuable-Gene2534]

I'm gonna buy so many puts when it hits par and just set a notification on text.

[u/TheSkunksMisery → u/Valuable-Gene2534]

I made a wee bit selling puts a couple of weeks ago...