Another piece of Strategy (MSTR) CEO Michael Saylor’s playbook appears to be taking shape after the company’s perpetual preferred stock, Stretch (STRC), hit a record high of $100.10 with trading volume reaching 1 million shares.
The milestone is significant because it allows Strategy, the largest holder of bitcoin to use your ATM bid against STRC to buy more of the largest cryptocurrency. STRC, described by the company as a high-yield, short-duration credit instrument, currently offers an annualized return of 10.5%, paid monthly in cash.
The ATM, established on July 31, had been on hold because the instrument was not trading at par. The company increased STRC’s dividend rate, initially to 9%, to help push the trading price towards the $100 face value. According to the latest 8-K filing, the company has $4.2 billion of available capacity for issuance of shares.
Strategy has already used ATM sales on its three other preferred perpetual products (STRK, STFR, and STRD), as well as its common stock to fund bitcoin purchases.
MSTR common stock has fallen 15% this year to around $253. With the multiple of net asset value (mNAV) hovering around 1.3, Saylor’s ability to successfully issue perpetual preferred shares will be key to continuing the company’s bitcoin accumulation on a non-dilutive basis.
STRC is up 0.5% in pre-market trading at $100.50 per share, while MSTR is down 1%.
