Strategy STRC Preferred Hits $100 for First Time Since May
STRC tagged $100 on Wednesday, up from a June low of $71.25, days after Strategy moved to daily dividends. Par reopens the at-the-market issuance window, but the bounce came after roughly $2 billion or more in buybacks, and one touch is not a hold.
Par is back. Strategy's STRC preferred shares touched their $100 stated value during Wednesday's trading session, according to Google Finance data. It is the first time since May, and it arrives days after the bitcoin treasury company switched to paying dividends daily.
That level is the one traders watch. The shares have climbed from a June low of $71.25, roughly a 40% recovery off the bottom. We tracked the slide in STRC hitting a record low as mNAV fell below 1.
Why $100 matters
STRC, formally Variable Rate Series A Perpetual Stretch Preferred Stock, has no maturity date and carries a 12% annualized dividend, or $12 per share on the $100 stated value. At or above $100, Strategy can resume issuing new STRC through its at-the-market program, potentially raising capital for bitcoin purchases. Below $100, the company has bought shares back and held off on new issuance.
Crossing the line does not flip a switch. Issuance and any bitcoin buying remain management decisions subject to market conditions.
Daily dividends and the buyback bill
Shareholders approved daily dividends on Oct. 28, with 99.3% of votes cast in favor, according to preliminary results shared by Michael Saylor. The system took effect Nov. 1, and the first cash distributions began Nov. 2. Dividends now accrue every calendar day and are generally paid the next business day. They were previously paid twice monthly.
Defending the price was expensive. One tally puts the recovery against roughly $2.25 billion of buybacks. Another counts about $2 billion repurchased between Sept. 28 and Oct. 25, and year-to-date repurchases of about $2.04 billion, including roughly $205 million spent on STRC rather than bitcoin. The figures do not reconcile, but both point to heavy support under the price.
Strategy's latest quarterly results showed about $5.1 billion in U.S. dollar assets as of Oct. 25, including reserves for preferred dividends and debt payments. Its bitcoin stockpile is valued at about $68 billion.
What to watch
Strategy can adjust the dividend rate monthly, but has said it intends to hold the current 12% until the stock shows sustained stability around $100. Read plainly, the company itself is not calling one touch a durable recovery.
For traders, the read is straightforward. A bounce that followed billions in buybacks is not the same as organic demand, and a tag of $100 is not a hold of $100. The real test is whether the shares stay at par without the company stepping in. That is what reopens the issuance window and decides whether STRC goes back to funding bitcoin purchases instead of absorbing cash to protect its own price.
