Strategy Combines MSTR, STRC in Capital-Markets Strategy Built Around Bitcoin

Michael Saylor, Chairman of Strategy, has unveiled a capital-markets strategy built around Bitcoin. The plan combines equity and credit products using MSTR, common stock that offers exposure to Bitcoin prices and growth potential from digital credit business STRC, preferred stock focused on reducing price volatility and providing dollar-based income.

According to Saylor, the goal of this strategy is to reduce the impact of Bitcoin price swings on credit investors. It aims to shorten cash-flow duration and convert Bitcoin capital into yield-generating corporate financial products. To achieve this, Strategy manages a single treasury structure with Bitcoin, dollars, debt, preferred stock, and common stock.

The company adjusts its capital structure by issuing additional STRC or repurchasing it, depending on market conditions. It also separates dollar liquidity into reserves for dividend and interest payments and funds for Bitcoin purchases and debt or share buybacks. The dividend rate of STRC is designed to be adjusted based on factors such as its market price, interest rates, Bitcoin prices, and reserve levels.