Strategy’s STRC rebounds to $100, set to facilitate increased bitcoin acquisition

The perpetual preferred STRC reaches $100 par during bitcoin decline, allowing for potential additional BTC acquisitions for the firm.

STRC (TradingView)

Key points:

• Stretch (STRC) regained its $100 par value for the first time since mid-January, allowing Strategy (MSTR) to restart at-the-market offerings for further bitcoin acquisitions.
• The preferred equity remained stable near par despite the recent fluctuations in bitcoin, bolstered by a monthly dividend rate that Strategy recently raised to 11.25%.

Stretch (STRC), the perpetual preferred equity issued by Strategy (MSTR), the largest corporate bitcoin holder globally, recovered its $100 par value during Wednesday’s U.S. trading session, marking the first such occurrence since mid-January.

STRC trading at or above par permits the company to recommence at-the-market (ATM) offerings to finance additional bitcoin acquisitions. STRC last reached the $100 mark on January 16 when bitcoin was trading around $97,000; however, as the leading cryptocurrency by market capitalization declined to as low as $60,000 by February 5, STRC fell to a low of $93 before its recent upswing.

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Designed as a short-duration, high-yield credit instrument, STRC currently provides an 11.25% annual dividend, distributed monthly. To reduce volatility and encourage trading near par, Strategy adjusts this rate monthly, having recently increased it to the current 11.25% yield.

MSTR common stock encountered pressure, dropping 5% on Wednesday to finish at $126, while bitcoin remains around $67,500.