Stretch (STRC), the perpetual preferred equity issued by Strategy (MSTR), the world’s largest corporate holder of bitcoin, regained its face value of $100 during Thursday’s trading session, giving the company the freedom to raise funds to add to its reserve of the largest cryptocurrency.
The recovery took nine business days after the ex-dividend date of March 13, when share buyers no longer qualify for the next payment. Ex-dividend share prices typically fall to reflect the cash being distributed to former shareholders.
Basically, STRC works by adjusting performance to control price. If the stock trades above $100, the company may cut the dividend to cool demand. If the stock falls below that level, they can increase dividends to attract buyers. Keeping the price anchored allows the company to issue new shares near par, generating capital that is then used to purchase bitcoins.
The return to par, this time, was slightly faster than the historical average of around 10 trading days for STRC, according to STRC.live.
STRC operates as a high-yield, short-duration credit instrument, offering an 11.5% annual dividend paid monthly. This structure helps incentivize trading near its face value of $100, allowing the company to use the issuance of shares at the exchange (ATM) to raise capital for additional bitcoin acquisitions.
In comparison, SATA, the equivalent tool issued by Strive bitcoin treasury (ASST), offers a higher dividend of 12.75%. Currently priced at $99.25, it is also close to its face value.
Strategy bought 1,031 bitcoins last week for a total cost of $76.6 million, or $74,326 per coin. However, the magnitude of that purchase was much smaller than recent acquisitions, and STRC was not on par during last week’s bitcoin buying.
The company’s holdings now stand at 762,099 bitcoins, purchased for approximately $57.69 billion, at an average price of $75,694 per bitcoin.
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