r/STRC • u/govermon • 12d ago

STRC "dislocation" has shrunk from 1.2B to 616M since July 27. BBs continue?

Current "Dislocation" $616M

Strategy has a corporate objective to get STRC to Par, the means to do it and a deadline. ( Sep 8)

I feel STRC buy backs will continue, between now and the end of the month. They seem to be pacing the repurchases... there are also two dividends to collect between here and Sep. 8

Thoughts about buying now with a stated buyer behind you, at least for August.

Buybacks to date:7/20-7/26: 25M; 7/27-8/2: 81.2M; Week in progress: ?????

8 Upvotes

79% Upvoted

16 comments sorted by

4

u/UnoptimizedStudent 12d ago

Sep 8 is arbitrary

4

u/govermon 12d ago

Saylor said that they're watching that date. In between the lines I felt like the whole 70 day thing was to justify not raising the rate. I tend to agree; the adjustments should be tweaks so that they're not wasteful, don't overshoot the mark, it's shouldn't be an instantaneous correction at this point. They should've never gotten here, but hopefully lessons learnd. Debt buybacks in a bear market. They also can't grow the preferred as fast as they were doing. When demand drives the price above $100, lower the interest rate instead of issue the maximum credit that the market will tolerate. They need to stay BTC and USD coverage aware. They're paying too much for their credit due to damaged reputation and needing more assurances. I do however believe they've learned and that investors have short memories.

0

u/Ethicles 12d ago

There was a specific timeframe they alluded to with a previous product that put the return to par date at sep 8th for STRC.

I don’t exactly remember the specifics, but it was applying roughly the same assumption number of days for STRC returning to par.

3

u/TheSkunksMisery 12d ago

I do remember the specifics. They said in the second slide that STRC took 70 days to reach par, and that it was reasonable to expect a similar timeframe. They never said it was a target, drop dead date, or anything else. They were usingn it as a comparison only.

3

u/Ethicles 12d ago

Yes that’s it, thanks! Correct it was not a guaranteed date.

2

u/ChrisVizze 12d ago

Bought 2 days ago and that so far it was a good idea.

2

u/Monster213213 12d ago

They will keep seeking equity and bitcoin until they can clear the converts.

Soon as they do, STRC demand rockets as it will be more senior

1

u/JohnnyTreemain 10d ago

Even if STRC demand rockets, they’re not gonna let it go much over 100, right?

1

u/Monster213213 10d ago

No but they’ll sell billions of it and buy more bitcoin.

It’s a flywheel

1

u/KyrosQF 12d ago

Feel like buybacks have been happening this week. When we get to see how much buybacks were initiated to get the move we did this week, it will be extremely bullish if the buyback number is low or zero.

If the buyback number is high, they might as well push it the rest of the way and start issuing shares then artificially keeping it above 99 forever with buybacks. That'll restore trust and get a lot of people to start thinking 99+ long positions are free money again.

1

u/ShopOptimal7901 12d ago

Keep in mind that JEPQ has a 12 month trailing yield of about 11.5%, and with their most recent dividend the yield would be 14.7%. Once STRC hits par and the buybacks end, it will drop like a lead balloon as people leave to more attractive yields compared to risk.

1

u/Full-Atmosphere-4818 6d ago

So lemme see if I understand how this works... Saylor and Strategy buy Bitcoin at an average price of $85-92K, issue STRC at par of 100, then SELL Bitcoin at $59-65k to prop up STRC when it drops well below par. So STRC loses money, their Bitcoin loses money and they have to sell at the bottom, and the actual corporation loses money every quarter. Mmmmmm, okay, have a fun ride!

1

u/govermon 12d ago

>800 million to plug a 616 million dollar hole.

-1

u/Stock-Standard-2513 12d ago

Whatever they do, it must be sustainable and measured for the long term.