STRC trading well below its $100 target level simply makes Strategy’s bitcoin funding and acquisition engine less efficient, because the company can no longer issue preferred stock at attractive terms, as Benchmark analyst Mark Palmer previously noted. This is very different from suggesting that the model is failing.
The most important problem is one of trust rather than solvency. STRC was marketed as a low-volatility income product designed to trade near $100, and its sharp decline has undermined investor confidence.
The real damage is to credibility, argues Two Prime CEO Alexander Blume, not the company’s ability to continue paying dividends. And so it may be confidence that is preventing STRC from returning to its face value of $100.
Michael Saylor’s repeated pivots and deviations from his stated plans have shattered investor confidence, leading to a dramatic collapse in the Strategy (MSTR) ecosystem, Blume told CoinDesk on Thursday.
“Beyond any spreadsheet or logic, markets are built on trust, especially when your investor base is focused on retail trading,” Blume, who runs the SEC-registered investment advisor focused on bitcoin, said in a Telegram message.
“Saylor’s repeated pivots and deviations from his stated plans, coupled with the poor performance of STRC and MSTR, have broken that trust.”
Blume has been sounding the alarm for months. In March, when Strategy’s perpetual preferred stock was still gaining momentum, Blume warned: “There is no free lunch, a product that pays more than 6% on Treasuries must carry additional risk.”
