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deathspiral
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$STRC TRADING 25% BELOW PAR WITH NO RECOVERY IN SIGHT 🔥
STRC is currently at $75, 25% below its $100 issuance price, and the so-called price stabilization mechanism has completely failed. The company has not raised dividends to push the price back toward par, leaving the structure in limbo. Analyst fair value estimates range from $55 to $144 depending on dividend assumptions, but with the company holding the right to cut dividends to SOFR, the downside risk is real.
The 11.5% yield to buy Bitcoin is a bad trade from a cost-of-capital perspective — even a 10% annual BTC return plus 5% inflation may not cover that expense. If Bitcoin corrects, Strategy may be forced to sell low to pay dividends, amplifying losses.
Is a buyback the most likely outcome, or will Strategy eventually lower the dividend to SOFR and let STRC find its true market value?
Not financial advice. Always manage your risk.
#STRC #PreferredStock #DeathSpiral #RiskManagement #MarketAnalysis
🔥
STRC is currently at $75, 25% below its $100 issuance price, and the so-called price stabilization mechanism has completely failed. The company has not raised dividends to push the price back toward par, leaving the structure in limbo. Analyst fair value estimates range from $55 to $144 depending on dividend assumptions, but with the company holding the right to cut dividends to SOFR, the downside risk is real.
The 11.5% yield to buy Bitcoin is a bad trade from a cost-of-capital perspective — even a 10% annual BTC return plus 5% inflation may not cover that expense. If Bitcoin corrects, Strategy may be forced to sell low to pay dividends, amplifying losses.
Is a buyback the most likely outcome, or will Strategy eventually lower the dividend to SOFR and let STRC find its true market value?
Not financial advice. Always manage your risk.
#STRC #PreferredStock #DeathSpiral #RiskManagement #MarketAnalysis
🔥
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