There’s more than just setting a dividend rate to keeping an STRC steady. Michael Saylor’s Strategy just explained how.
Will STRC stay near $100?
In Saylor’s latest article about STRC, one thing is clear right off the bat: the dividend is just what you see on the outside.
It goes like this.
MSTR, the common stock, soaks up most of Bitcoin’s chaos – for better or worse. That lets STRC offer stable dollar income, with a price that’s meant to stay close to $100.
When STRC trades above $100, the company can sell more of it for capital. When it slips below, Strategy can buy shares back at a discount. This helps cut future dividend bills.
However, buybacks aren’t a guaranteed price floor.
It also keeps two separate piles of dollars. One is a reserve set aside only for dividends and interest. The other is cash for things like buybacks or buying more Bitcoin.
This way, the same dollar never gets counted twice.
Then there’s the dividend rate itself, which can move up or down. A higher rate might pull in buyers, but it also means bigger payments going out.
It’s not just some textbook theory. STRC slid below $80 in June before buybacks helped drag it back into the high $90s by mid-September.
STRC might be built to still, but MSTR stock isn’t
Remember how MSTR is supposed to take the hits so STRC doesn’t have to? Well, it’s been doing exactly that.
The stock was at $170 nearly a week ago. At the time of writing, MSTR was at $154; a 9% dip.
There was a nice leap to $163 midway, but sellers shut that down within the hour.
There’s not much to write home about. RSI was at 41, so buyers have lost steam. The Chaikin Money Flow was at -0.24, so money is moving out of MSTR stock.
So the calm part of Strategy’s setup is working as designed. It’s just that the bumpy part is proving just as bumpy.
Final Summary
- Strategy explained how it keeps STRC stable and near $100.
- MSTR stock droped 9% to $154.