Is Another Piece of Michael Saylor’s BTC Strategy Starting to Fall Into Place?

Strategy (MSTR) Executive Chairman Michael Saylor continues to make strategic moves as the company’s perpetual preferred share, Stretch (STRC), reached a record high of $100.10 with a trading volume of 1 million shares. This milestone is significant as it allows Strategy, the largest holder of bitcoin, to leverage its at-the-market (ATM) offering against STRC to acquire more of the cryptocurrency. STRC, described as a short-duration, high-yield credit instrument, currently offers an annualized 10.5% return, paid monthly in cash.

The ATM offering, which was established on July 31, had been on hold due to the instrument not trading at par. To address this issue, the company raised STRC’s dividend rate from 9% to help push the trading price closer to the $100 par value. According to the latest 8-K filing, Strategy has $4.2 billion in available capacity for share issuance. The company has previously utilized ATM sales on its other three perpetual preferred products — STRK, STFR, and STRD — as well as its common stock to fund bitcoin purchases.

Despite the success of the STRC offering, MSTR common shares have experienced a 15% decrease this year, trading around $253. With the multiple to net asset value (mNAV) around 1.3, Saylor’s ability to issue perpetual preferred stock successfully will be crucial for the company to continue accumulating bitcoin in a non-dilutive manner.

In pre-market trading, STRC is up 0.5% at $100.50 per share, while MSTR is down 1%. Saylor’s strategic moves and the company’s focus on acquiring more bitcoin through innovative financial instruments demonstrate a forward-thinking approach to maximizing shareholder value and expanding their cryptocurrency holdings.