STRC by Strategy (formerly MicroStrategy) currently offers investors more than 28% upside potential if it returns to par and pays a dividend next year. But investors keep selling it anyway.
Over the past week, STRC has fallen 2% and is down 11% in 30 days. The sale, in the face of Strategy’s generous offer, represents a loss of confidence in the company’s management, including founder Michael Saylor.
As of today, STRC had a par value of $100 and was paying a 12% annual dividend, but was selling for less than $86 per share.
If the stock returns to Strategy’s intended trading range of $99 to $100 and pays dividends, investors could earn at least a 15% total return on stock price appreciation and semi-monthly dividends.
Even better, these dividends have favorable tax benefits as a return of capital, making 12% even higher than the tax-adjusted 12% for many investors.
The looming strategic priority tax bill
Furthermore, an increase from less than $86 per share to more than $99 per share can occur at any time, not just at the 12-month expiry. This makes the time-weighted value of an initial 15% increase even more valuable than an even increase over 12 months.
Additionally, as if this offer wasn’t sweet enough already, Strategy will pay a 12% dividend rate on the full $100 par value of each share, rather than based on the dollar value of investors’ STRC holdings.
That means investors who bought STRC for less than $86 per share actually earned $1. Real dividend yield is over 14% Plus capital tax refund.
Add these numbers (15% plus the 14% tax benefit) and this proposal sounds too good to be true.
For many investors, there is probably a chance of more than 28%.
STC’s corporate goal is to trade between $99 and $100.
Michael Saylor continues to say he wants STRC to trade between $99 and $100, and if that happens within a year, investors could earn more than 28%. Still, the market continues to sell.
The offsetting risk to STRC’s incredible offer is, of course, that STRC’s price will continue to fall anyway.
After all, there is no strategy guarantee that STRC will recover above $99. In fact, it can trade at any price down to $0.
It is simply preferred stock issued by Saylor’s company to raise funds. $BTC Purchased item. The stock traded as low as $71.25 on the Nasdaq.
In other words, management promised to protect the $99-$100 range over the long term, but allowed the stock to trade 28.75% below par during that time. not good.
The board of directors intends to keep STRC’s trading price near $100, according to the company’s filing.
But investors remain wary, even though the company offers funding at an effective yield of about 14%, well below the yield on junk bonds and comparable to interest rates on credit cards.
Strategy STRC hit another all-time low today
STRC traders refuse to bid at face value
Although STRC is not quite an insured savings product, we have built STRC to behave more like a high-yield bank account or money market with higher payout rates.
FDIC-insured bank accounts and money markets cannot afford to lose money like the price of STRC.
A rational investor who fully trusts the strategy to maintain above-average dividends should pay up to $100 in full. But no one is doing that now.
In an attempt to regain confidence, Strategy has raised its dividend rate from 9% when STRC debuted in July 2025 to 12% after a long period of increases, but STRC’s price continues to deteriorate.
Dividend increases and share price declines each acknowledge that demand is too weak and uncertainty remains too high.
After paying $1.25 billion, STRC is still in the mid-$80s
Unable to sustain the quasi-peg, Strategy’s annual dividend payments amount to $1.25 billion. And this number is rising rapidly.
The reason why bidders are not participating lies in Strategy’s own disclosures. The company is free to change or suspend dividends, makes no guarantees about the stock price, and does not give holders a way to redeem their STRCs at their desired $100.
To make matters worse, Strategy is now selling off the assets that make its entire plan work.
On July 6, Saylor revealed that Strategy had sold 3,588 copies. $BTC This will be used as the source of dividends. Strategy stocks like STRC should, in theory, be supported by a growing Treasury. $BTC That has shrunk in recent weeks.
$BTC It was trading at around $62,700 on Thursday, down 28% since the beginning of the year. MSTR, Strategy’s common stock, began trading today with the stock expanding, down 38% year-to-date. $BTCLosses are on the downside.
