We calculated the present value of STRC — it’s bad for MSTR
The post We calculated the present value of STRC — it’s bad for MSTR appeared on BitcoinEthereumNews.com.
When the net present value of Stretch (STRC), the dividend-yielding preferred share issued by Strategy (formerly MicroStrategy), is calculated, it makes disappointing reading for MSTR shareholders. Michael Saylor hopes that STRC will somehow fund trillions of dollars worth of bitcoin (BTC) purchases for shareholders of his common stock. However, while STRC raises capital that will mathematically create a positive BTC yield for MSTR, it’s actually extraordinarily expensive over the long term. Strategy advertises these immediate BTC purchases as the up-front benefit of STRC to its MSTR common stockholders. It happily praises BTC Yield, the extra quantity of BTC that MSTR shareholders enjoy today when Strategy buys BTC from the cash it receives selling STRC. STRC obviously improves the company’s current balance sheet because it raises capital today and throws all of its servicing costs into the future. Like any other capital-raising activity, Strategy promises future benefits in exchange for capital today. Read more: Michael Saylor’s Spinal Tap ad says STRC is like a bank account — it isn’t The 11.5% dividend Despite STRC’s morphing terms, such as its variable interest rate and quasi-peg, it’s possible to estimate what STRC is worth today. Although no one has offered to buy out STRC from Strategy entirely, a theoretical calculation about what this asset is worth can illustrate its actual value for common shareholders of the company, rather than the misleading BTC yield metric that ignores all of STRC’s future obligations. Specifically, STRC pays 11.5% annualized dividends in monthly cash installments. Although its dividend rate is variable and subject to suspension at the discretion of the board of directors, a prospective buyer could use 11.5% as a rate for calculation. Indeed, if STRC trades substantially below its $100 par value (also called its “stated amount”) in the future, as it has in the…
Filed under: News - @ March 19, 2026 2:25 pm