TLDR Tech / Crypto
The Genius and the Danger of STRC
Strategy's Perpetual Stretch Preferred Stock (STRC) uses a variable monthly dividend, currently around 11.5%, to hold shares near a $100 par target, a mechanism that has already financed over 50,000 BTC in purchases ($3.5B+) by enabling repeated capital raises tied to bitcoin asset coverage. The primary risk is not solvency but governance: SEC filings permit management to cut payouts by up to 25 basis points per month at absolute discretion, and unpaid dividends accrue without triggering default, shifting stress from the issuer to investors. NYDIG frames STRC as effectively placing investors short a put on bitcoin asset coverage, earning yield in exchange for bearing downside exposure, with no fixed strike or maturity and outcomes shaped by management decisions rather than market structure. Both STRC and Strive's comparable SATA product have already traded below par during sharp BTC drawdowns, at which point new issuance becomes uneconomic, stalling the capital flywheel the model depends on.
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