Saylor's STRC Outperforms Bitcoin by 56 Percentage Points
Strategy Inc.'s Executive Chairman Michael Saylor recently shared some surprising performance data on his company's preferred securities and Bitcoin. According to a one-year return chart, Strategy's STRC perpetual preferred stock gained 9% over the past year while Bitcoin lost 47%. This means that STRC outperformed Bitcoin by 56 percentage points during this time period.
The chart also showed that Strategy's other preferred securities recorded losses of 8% to 27%. However, it's worth noting that these figures are based on a one-year return and do not take into account the company's common stock, which closed about 76% below its level a year earlier. The STRC perpetual preferred stock has a variable annualized dividend rate designed to encourage trading near its $100 stated value.
Saylor has presented STRC as the income-producing layer of a four-part digital money stack, with Bitcoin holding the capital role. He believes that the company's preferred securities can create income instruments with different volatility and risk characteristics. Despite STRC's positive one-year return, it fell to an all-time low of $71.25 in June and has traded below its $100 stated value since.
Strategy has sold approximately $218.4 million of Bitcoin year-to-date to fund a portion of its preferred dividends. The company's ability to meet continuing cash obligations while maintaining its Bitcoin-focused balance sheet will be crucial in determining the success of its dividend structure. Saylor previously said that Bitcoin would need to achieve annual appreciation above the company's BTC breakeven rate for capital gains to cover STRC dividends over time.
The preferred stock is not collateralized by the company's Bitcoin holdings, and Strategy has authorized up to $1 billion in preferred-security repurchases alongside a separate $1 billion common stock repurchase program. The company's Digital Credit Capital Framework established a cash reserve policy, revised STRC's dividend policy, and authorized these repurchases.