Saylor's Strategy Tames STRC Volatility Near $100

Michael Saylor's Strategy has explained how it keeps MicroStrategy's (MSTR) common stock steady near $100, while its own stock, STRC, swings.

The key to this stability lies not just in the dividend rate but also in a few clever financial arrangements. STRC trades closely with MSTR, which soaks up most of Bitcoin's price fluctuations. This allows STRC to offer stable dollar income and maintain a price around $100.

When STRC dips below $100, Strategy can buy back shares at a discount, reducing future dividend payments. Conversely, when STRC trades above $100, the company can sell more shares for capital. To avoid double-counting dividends and interest, Strategy maintains two separate pools of dollars: one for dividends and the other for buybacks or buying more Bitcoin.

On top of this, the dividend rate itself is adjustable, allowing Strategy to balance payments to shareholders with the need to keep STRC's price stable. This strategy has been put to the test; in June, STRC briefly dipped below $80 but was pushed back up into the high $90s by mid-September thanks to buybacks.

In contrast, MSTR stock has seen significant volatility, dropping 9% from its recent peak of nearly $170 to around $154. While there were brief moments of higher prices, including a jump to $163, buyers lost steam and sellers took control, with money flowing out of the stock according to metrics.