Michael Saylor used AI to adapt famous scenes from mockumentaries This is Spinal Tap To promote STRC as a competitor to insured savings products such as bank accounts and money markets.
STRC is a stock in Saylor’s company Strategy (formerly MicroStrategy) that pays non-guaranteed dividends at the sole discretion of the company’s board of directors.
Unlike U.S. bank accounts and money markets, which are insured against losses by the FDIC, NCUA, and SIPC, STRC does not provide such guarantees.
In fact, over the past 52 weeks, its value has ranged from $90.52 to $100.42, well below its $100 par value. For example, for the past two weeks, STRC has been trading below $94.
In Saylor’s new promo, a Nigel Tufnell look-alike explains to viewers that earning 0% dividends is “just like a regular current account”, or that viewers can “increase it to 3%” in the money market.
If you want a “nice” payout, you can turn the dial to 10% or choose STRC’s 11%.
It ends with a call to action and a celebratory chorus, in which viewers are told they can “increase their income.”
Even though STRC is not an insured savings product of any type, Thaler has made similar comparisons in various broadcast media. In fact, the brazenness of this new Spinal Tap-themed ad is nothing out of the ordinary.
Read more: Strategy managers are wrong about BTC backing STRC
Months likening STC to a bank account and money market
“I want everyone in the world to have a high-yield bank account with a yield of 10% or more,” Saylor said on national television last September, referring to STRC.
“Or they want a financial market that will give them two or three times as much money as regular financial markets.”
Saylor has repeatedly likened STRC to insured savings products such as FDIC-insured bank accounts and SIPC-insured money markets.
His company calls the STRC a “Treasury Credit,” even though the common understanding of a U.S. Treasury credit is that it is literally a risk-free savings bond, redefining both terms using his ever-expanding dictionary of invented terms.
The company also hid a disclaimer regarding STRC’s “price stability” statement on page 90 of its latest financial results briefing, detailing that STRC is not a money market fund.
We also plan to continue paying dividends and would like to encourage traders to keep STRC near par, but in reality…There is no need to hold assets backing STRC shares.”
Thaler calls STRC his company’s “greatest feat of financial engineering to date.” He previously said Strategy could sell $10 trillion worth of foreign currency-denominated stocks and similar products.
“They want higher yields than the money market. We designed (STRC) for them,” Thaler said in October. “Who is[STRC]targeting? There’s $18 trillion in bank accounts.”
Read more: The bizarre depictions of Michael Saylor by AI
Increase in claims for “high-yield savings accounts”
In the public record, Saylor continued:If you understand this and believe in Bitcoin, you’ll find that it’s a high-yield savings account that only pays twice as much as a regular savings account.”
These quotes are not cherry-picked examples. There are many similar examples.
“How many people want money markets that pay 10% instead of 4%? A lot of people want that. So we just created something like a money market instrument,” Thaler said at another conference.
In another egregious example, Saylor likened STRC to an FDIC-insured bank account after calculating the tax-advantaged yield equivalent to STRC dividends for each state of residence.
“Created a bank account that pays 17-20% This can be achieved through a combination of digital capital and digital credit instruments through digital treasury companies that issue securities to pay dividends,” he declared.
“Our goal when designing STRC was to create a high-yield bank account-style product,” Saylor said from the stage in Dubai.
He repeated that claim. “Our goal is to provide a bank account that pays 10% instead of your bank. It pays you 4 or 3 or 2 or 0. That is STRC. ”
Not a bank account or money market
To be clear, despite Thaler’s touts, STRC is not like a bank account or a financial market.
In fact, there is no FDIC, NCUA, SIPC, or other insurance that guarantees face value.
The strategy is not required to hold all of its assets to support the par value of STRC, is not required to maintain specific pricing or stable values, and is not subject to the liquidity requirements of real money market funds.
STRC can and has lost the value of an investor’s principal. During periods of high volatility, it has historically traded more than 9% below its face value.
Investors do not have the right to redeem the strategy directly at par, so they must expect secondary market traders to bid shares close to par.
