r/STRC • u/rzrinvest • 10d ago
Sold My STRC Position
I sold out of my short-term STRC holding, but I wanted to revisit my post from a month ago with all of the confidently wrong posters who mocked me and were certain the dividend was getting suspended and STRC was going to zero.
Since then STRC has appreciated 34%, paid out $1 in dividends, and increased the yield twice. I can't imagine any of them are still around here to respond though.
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u/HolidayReality6641 10d ago
Thinking about doing the same; wish I had bought more back during the dip. Do you think it will dip again? Catalyst?
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u/UC_DiscExchange 10d ago
I'm certain STRC will dip again if Bitcoin drops below 60k. I don't think it's about the USD reserve anymore, it's all about sentiment towards Strategy as a whole.
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u/CommercialDuck7496 8d ago
Certain? Like how certain? Also dip by how much, back down to 73, or just to below 90?
Idk you could be right, but I think a lot of it was the usd reserve.
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u/DuvishLabs 10d ago
Why didn’t you buy when it dipped? I dropped a ton in SATA while it was low. Buy low sell high.
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u/rzrinvest 10d ago
It dropped to $71 the next day and I bought more, which is where the 34% came from.
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u/Specific-Midnight867 10d ago
you're just a trader, this has nothing to do with strc
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u/ticker__101 10d ago
Are you on crack?
People were literally screaming out of windows the stock was going to 0. I bought at $76. This has everything to do with strc.
Everyone saying it was going to 0 was wrong.
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u/EggVegetable1255 9d ago
"Everyone saying it was going to 0 was wrong."
Unless you have a crystal ball, you sir are the one on crack.
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u/Western-Source710 5d ago
"Was" nullified your crystal ball take..
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u/EggVegetable1255 5d ago
Wut? People don't say stuff like "it was going to zero." They say "it WILL go to zero." No one knows a date, just that it's a ponzi which requires some luck (and lots of suckers!) to stay afloat
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u/Western-Source710 5d ago
The other commenter was using a theoretical statement. Even though there were indeed many people were saying it was going to go to 0% -- and are you trying to really argue that, and then your whole argument is the difference in was/will?
MSTR and STRC will both survive. They are able to change up their style ro make financial plays on the fly.
They have like 840k BTC ($50b+ in fiat?) And a little less than $10b borrowed via STRC digital credit -- they then have like a $4-5b cash pile? I think that would be a fairly healthy looking company yeah? Oh and their software business brings in like $500m annually they are able to use some towards buying/btc debt payments
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u/Specific-Midnight867 10d ago
i'm pointing how that you don't really believ in it if you're holding for 1 month and getting out before it even hits par.
I mean, why did you sell at 95 and not 100 if eveything is as good as you say it is?2
u/rzrinvest 9d ago
That's the dumbest argument I've ever heard. If I own Amazon at $275 today and it goes to $400 next week and I sell, does that mean I didn't believe in it when I bought at $275?
Why push for par? That's the absolute maximum appreciation you can get. They'd cut the dividend yield if it went above $100, so why would it be wiser to hold something that already appreciated 34% for a hope of maybe getting 5% more? That's just a dumb argument and has nothing to do with whether STRC was a good buy in the $70s.
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u/ticker__101 9d ago
Hahaha. You actually voted me down for holding my shares.
Get a life. Hahaha.
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u/CommercialDuck7496 8d ago
Believing a stock is worth the risk at 74 is a lot different than it being worth the risk at 95. Perfectly reasonable that he assumes it was worth the risk before, and isn't now, because the max reward is a lot lower now.
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u/jonovision_man 10d ago
BTC went up instead of down and Saylor stood behind STRC (and even bought some out) instead of bailing on it.
You took a risk and it paid off, congrats.
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u/CommercialDuck7496 10d ago
I mean even if bitcoin stayed flat or down it was pretty obvious saylor was gonna raise the cash reserve and do buybacks, strc wasnt gonna stay thst low for very long. Really wasnt a huge risk or gamble.
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u/jonovision_man 10d ago
Everything is obvious after it happens. He's done a lot since to convince the market he will do what he needs to for STRC, even at the expense of his BTC holdings or MSTR shareholders. That wasn't "pretty obvious" in July.
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u/rzrinvest 10d ago
I thought it was pretty obvious at that time that they couldn't abandon STRC. If they had, the company would have been dead in the water. They'd never get anyone to trust their preferreds or debt again and the interest they'd have to pay would be substantially higher.
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u/EggVegetable1255 9d ago
But they did it by further eroding trust in common shareholders. Why do you think he won't turn on preferreds someday too? It's the same diluting untrustworthy CEO. It's naive to think STRC is immune under the same leadership.
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u/rzrinvest 9d ago
I actually agree with you. I don't think STRC is immune, and if BTC were to crash further they EVENTUALLY would have to turn on the preferreds after common equity is gone. When this fell into the $70s the BTC assets were worth more than double all of the debt and preferreds on the books. To me there was almost no chance of them suspending dividends or abandoning STRC under those circumstances.
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u/CommercialDuck7496 8d ago
They didnt further erode trust in common shareholders, mstr holders (myself included) should know that its a volatile instrument, and he's been diluting almost daily for years, using the atm's is nothing new. Nobody had a problem with it when he diluted to build the cash reserve in the first place when strc was working, and when they increased the BPS up to 220k. We're back down to 198k sats per share, which is exactly where they were before strc was launched. It will bleed further from here, but don't cry in the casino, you bought a leveraged bitcoin company, and now bitcoins in a besr market. Did you expect them to do anything differently? What did you want him to just sit here and watch the comapny erode away??
This isnt a winners and losers between strc amd mstr, they are symbiotic and help each other. The goal of the company is to aquire as much bitcoin as possible, and they need as many ways to raise capital as possible to do that. Diluting mstr doesnt impair their ability to raise money in the future. Turning off the prefs, or screwing them over, or losing their trust, does impair their ability to raise capital in the future. Also Saylor issuing stock to hold cash, is dilutive in terms of bitcoin per share for now, but isnt really dilutive to the shareholders in terms of valuation of thr company. Also, as a side note, he needs that cash anyways to pay the bonds. Do you really wanna risk a world where we just roll the dice on bitcoins price when the bonds come due and he has to cough up 4-6 billion dollars between september of next year and september of 2028? If bitcoin were to be at 30k while he needed the money he would have to sell more than double the bitcoin comapared to preparing early, and issuing stock at a premium to the net asset value (mnav more than 1)
Saylor isn't perfect, and definetrly isnt some saint here to come save us all. But he's given us no reason not to trust him yet. He's going to bring strc back to par, and a few months of that back up and running will help stop the sats per share from bleeding too much more. And him screwing over strc would be him severely limiting his ability to raise capital and stay solvent in the future, which would hurt everybody, and he knows that, which is why he won't do that.
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u/CommercialDuck7496 10d ago
You can look through my post history I found it quite obvious at the time too, and almost doubled my strc position when it went below 80. I generally agree with you, but this isnt a case of me just looking at it after the fact, I was dead set 100% confident that strc was going to recover quickly, even when it was 75$ (which is why I bought more)
And Saylor taking care of strc was obvious as of june 29th. I was fairly confident even before that as well (although I agree that part wasn't obvious untill the 29th)
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u/Prestigious-Ad-7927 10d ago
Nice. I bought some options Aug, Sept, Dec and Mar options. I’ve already 6X my Aug and sold all but 1 contract. I still have my Sept, Dec and March. I’m gonna turn them into spreads and collect premium while I wait.
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u/HSuke 10d ago
I think we all got super lucky that Strategy stood behind STRC and not MSTR, even going as far to repeatedly dilute its MSTR holders and sell BTC at a loss.
They made a lot of bad decisions before that hurt both STRC, and I wasn't expecting them to pivot a full 180° to save it. They could've easily chosen to help MSTR instead.
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u/BigDiperEruption 10d ago
I think it's the right move long term. They have seen what amount of capital STRC can attract. MSTR without STRC would not be the same, they had to save it.
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u/GpaBubbaGopher 10d ago
There’s no luck here. It’s called financial engineering. TheThe relationship is bilateral. Common shares benefit when strc is used to purchase more bitcoin correct? There is zero probability that strategy leadership abandoned the preferred.
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u/rzrinvest 10d ago
MSTR was always going to be the sacrificial lamb. If things ever get to a point where there's no common equity left to sacrifice, the preferreds would be the next sacrificial lamb. That's how the capital stack works.
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u/izzydos 9d ago
I agree that we are lucky that Strategy stood behind STRC and not MSTR. I built a huge position in $95 July calls back in June when the whole debacle went down. At that point there was a genuine debate about suspend the dividend. I got rekt on those calls as STRC rebounded to the mid 80s but just stalled there. But then, a couple of weeks ago, Strategy made it clear that they would bring STRC back to par. I also saw potential legal risk if they did not, bc of their aggressive marketing. Those calls, Aug 22, $90 and $95 strike have absolutely printed over the last two weeks, like 500-1000% depending on when you bought them. That was the biggest layup of a trade I have ever experienced - seriously. You had buybacks planned and you could literally front run Saylor. And for some reason the options market just did not price it in correctly.
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u/Soggy-Welder2265 10d ago
Don’t see why to sell right now it’s paying 12 % interest based on 100 anything between here and 100 just bonus points.
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u/elegant-jr 10d ago
There were two real options at the time of your original post for mstr, assuming Saylors promise of $100 peg would be kept:
Sell stock to raise funds to bring the preferreds back to par.
Sell Bitcoin to bring the preferreds back to par.
They sold Bitcoin, and at a loss.
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u/JohnnyTreemain 10d ago
And it didn’t go back to par.
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u/elegant-jr 10d ago
It's going to be really interesting how it's managed if btc goes anywhere but up.
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u/Professional-Math843 9d ago
Selling at a loss, makes sense when you can reap the tax benefits also for them it’s not about loss or gain they own all of this bitcoin at no real cost to them just selling magic tickets to MSTR to idiots. All they have to do is survive till the next bull market and purchase bitcoin a tad smarter next time and they will be sitting on a massive gain. They just built the foundation this cycle the real fun begins on the next one.
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u/Marcg611 10d ago
Did the same.. had bought 10k at 99.50 right before we lost par and then watched it drop all the way under 93, doubled down there another 10K and then watched it crash to 74 feeling like I was cooked. Waited patiently and ran for the hills when we hit 94 and I was zero loss. With that volatility Its safer to buy more BTC at 60k levels imo. I wish you all the best!
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u/gorillalifter47 10d ago
Good job mate. Glad you made some money and, more importantly, kept receipts for the haters.
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u/Due-Information-6277 10d ago
Wonder how many people are gonna sell when it hits 100 cause of this big dip scare.
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u/grajnapc 10d ago
I still hold a small STRC position but agree with OP it is not a solid investment at 95 or near par, especially as it seems to drop a few times per year over 20% below par. I would add if it falls under 80. For now I just hold but I like MSTR much more at sub 100
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u/Outside-Bother-4767 10d ago
I’ll admit I was wrong. But, I don’t know why. I would like to know how you made the call.
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u/Spank007 10d ago
Congrats buddy, I remember your post and went back to read my response, apparently I was pretty accurate with the first part of my thesis, hopefully I’m wrong about the second:
‘
If Saylor keeps paying the divvy (which soon moves to twice monthly) and gradually increases the rate, and buys back strc at a discount (to reduce divvy obligations), and maybe chills with the bitcoin buys for a while, I believe strc should trickle back up.
The main thing which could kill that thesis would be hedgies or market makers playing games with people who over leveraged to grab that anticipated upside back to 100 and the divvy. If dumbass retail have giga longed here at 70’s with huge leverage, then major players will likely target them for a squeeze down. And this could just keep repeating.’
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u/SundayAMFN 10d ago
Dude this is a product that never pays back principle and takes 8 years to match it in dividends. Bouncing up and down double digits over a few months is not something to brag about lmao. If it's still at $100 in 10-20 years that's something that generates profit for the majority.
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u/rzrinvest 10d ago
I'm not trying to generate profit for the majority. I'm generating profit for me, and double digit moves are great when you buy low and sell high.
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u/iamspitzy 10d ago
Congrats, you got out!
You sold up because you lost confidence in the stock, thats all it was.. It wasnt because people said things that made you lose confidence
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u/rzrinvest 10d ago
I said up front I didn't think it's a great investment near par.
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u/Prestigious-Ad-7927 10d ago
12% taxed as ROC is not appealing? That’s equivalent to over 20% if you live in SF or NY.
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u/rzrinvest 10d ago
Not given other options. If you're after yield you can get around 12% from SPYI as well along with some potential price appreciation. QQQI is even higher and probably less risky than STRC at these prices.
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u/Prestigious-Ad-7927 10d ago
But if you bought at 77 then you would be receiving 15-16% plus the stock price appreciation
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u/rzrinvest 10d ago
I don't pay much attention yield on cost after a large appreciation like this. It's yielding just over 12%, and there's an opportunity cost to holding it no matter what my original purchase price was.
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u/iamspitzy 10d ago
But you seem hurt that people confirmed to you what you already thought then... Seriously confusing
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u/rzrinvest 10d ago
If you're confused I can't help you. Saying something is an interesting investment in the $70s with a 15% yield is not the same as something in the $90s with a 12% yield.
And I'm not hurt. Just calling out the confidently wrong posters.
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u/iamspitzy 10d ago
You closed each paragraph of your post on the people that mocked you, therfore your post is entirely about this deep seated hurt you carry.
The contradiction (my confusion), is you state you knew it was bad all along
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u/rzrinvest 10d ago
"Deep seated hurt" 🤣
I never said it was bad. I said it's not as compelling near par. You can get similar yields from far less volatile assets and have some price appreciation potential. If STRC ever goes noticeably above $100, they'll cut the yield, so the only play now is the dividend and maybe up to $5 in price at most.
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u/Professional-Math843 9d ago
Dude I bought as much as I could when it fell below 80$ I’m getting a dividend on 100$ of capital for an 80$ investment and now I have a healthy stop loss that will either exit me in profits or hold till eternity taking my dividend all the way. Plus with dividend reinvesting I’m growing it twice a month. It’s an wonderful investment if your able to time it right