Bitcoin Plunges, but Michael Saylor Says STRC Still Delivers Gains

Key Takeaways

Saylor Highlights Income During Bitcoin’s Slide

Michael Saylor, founder and executive chairman of Strategy Inc. (Nasdaq: MSTR), compared STRC’s returns with bitcoin’s price performance on X on Nov. 14. STRC, also called Stretch, is its preferred stock with a dividend rate the company can adjust. The figures covered one week, one month, three months, and one year.

He outlined his digital credit model:

“Bitcoin is Digital Capital. Strategy transforms it into Digital Credit. Over the past month, bitcoin fell 17.3%. STRC’s price was essentially flat, and dividends brought its total return to +1.0%.”

Bitcoin Plunges, but Michael Saylor Says STRC Still Delivered Gains — STRC’s dividend-inclusive returns versus bitcoin’s price changes through Nov. 13. Source: Strategy/Michael Saylor.

The chart shows STRC returned 0.3% over one week and 13.4% over one year, while bitcoin fell 9.1% and 29.8%, respectively. Over three months, bitcoin gained 8.7%, exceeding STRC’s 7.5% return. The figures used data through 4 p.m. Eastern time on Nov. 13 and counted STRC dividends without assuming those payouts purchased more shares.

As of this writing, bitcoin traded at $64,428, down 5.85% over 24 hours, according to market data updated at 4:26 p.m. Eastern time on Nov. 14. Losses reached 14.37% over seven days, 21.21% over one month, and 32.22% over one year. The latest monthly decline exceeded the 17.3% drop in Saylor’s comparison, which used the previous day’s cutoff.

STRC’s 12% Rate Relies on Corporate Funding

Strategy’s STRC market metrics listed a $99.91 closing price on Nov. 13 and a 12% variable annualized dividend rate. At 12%, the dividend amounts to $12 a year per $100 stated amount per share if the rate remains unchanged.

Owning preferred shares creates a financial claim on the issuer, while direct bitcoin ownership gives the holder the cryptocurrency itself. STRC’s distributions depend on corporate funding, and its trading price can change independently of bitcoin.

Those funding requirements drew criticism from economist Peter Schiff, who questioned the assumptions behind STRC payments on Nov. 12, challenging expectations that long-term bitcoin appreciation could support the model. His criticism concerned payment sustainability, whereas Saylor’s latest chart measured historical investor returns.

Share Repurchases Continue as Bitcoin Holdings Lose Value

Common-stock sales financed the company’s latest bitcoin purchases and preferred-share repurchases. During Nov. 2-8, Strategy bought 1,036 BTC for $81.9 million. It also spent $188.3 million buying back 1,887,464 of its own STRC shares.

Meanwhile, Strategy’s bitcoin holdings fell further below their acquisition cost as the cryptocurrency declined. Valuing its disclosed 850,364 BTC at $64,428 produces approximately $54.79 billion, against a $64.16 billion purchase cost. That implies an unrealized loss of approximately $9.37 billion, based on its last reported holdings.

Separate dollar reserves and dividend funding supported the company’s payment obligations. As of Nov. 8, Strategy held a $4.77 billion designated dollar reserve, set aside for preferred-stock dividends and debt interest, alongside $146.2 million in separate cash. During Nov. 2-8, it used $21.1 million from the reserve to pay preferred-stock dividends.