I sold out of my short-term STRC holding, but I wanted to revisit my post from a month ago with all of the confidently wrong posters who mocked me and were certain the dividend was getting suspended and STRC was going to zero.
Since then STRC has appreciated 34%, paid out $1 in dividends, and increased the yield twice. I can't imagine any of them are still around here to respond though.
Prior to this week I had no interest in investing in STRC. At close to par value, I didn't find the yield compelling; however, I've been watching this week and established a position this morning at around $77. There is mass panic right now claiming this is worthless. There are a few reasons this isn't true.
While Strategy can pause dividend payments if needed, the dividends still accrue as this is a cumulative preferred meaning they'd still be obligated to pay the debt obligation
It was designed to stay near par value with an interest rate that resets monthly. It was relatively close to par value at the last reset. The crash is happening in the middle of the month. It's not fair to say STRC's mechanism doesn't work before it's even had a chance to work at the next reset.
I believe current debt and preferred stock accounts for less than $25B while their Bitcoin holdings are valued at $50B.
MSTR common shareholders would be wiped out first.
That's not to say I'm recommending STRC, and it could absolutely collapse if BTC has another steep decline, but it is compelling at these levels.