Strategy has a 10-month cash runway for dividends, but retail investors are losing faith
Key takeaways
- Michael Saylor's bitcoin BTC$59,044.02 treasury firm still has 10 months of dollar reserves available to cover STRC's dividend obligations, so the greater concern is what it has done to investor confidence.
- STRC, the perpetual preferred stock meant to hold a $100 par value, has continued its collapse to $75, a 25% discount to its peg.
- The company's enterprise multiple to net asset value (mNAV) now sits at just 1.05, as it continues to compress from the high-flying premium that long underpinned the company's bull thesis.
The current price doesn't put those payments at risk.MSTR fell 8% to $86 on Thursday, its lowest level since February 2024, while STRC dropped to $75, trading at a 25% discount to its intended $100 par value.CEO of Two Prime, Alexander Blume, said repeated changes in Strategy's plans, combined with the weak performance of MSTR and STRC, have undermined trust among retail investors.Traders may be panicking about Strategy's (MSTR) stock falling, 8% lower at of writing on Thursday at $86, amid concerns about its ability to meet dividend obligations, but the bigger issue is not if the company is about to implode.
Michael Saylor's bitcoin BTC$59,044.02 treasury firm still has 10 months of dollar reserves available to cover STRC's dividend obligations, so the greater concern is what it has done to investor confidence.
STRC, the perpetual preferred stock meant to hold a $100 par value, has continued its collapse to $75, a 25% discount to its peg. MSTR is 8% lower on Thursday as of writing at $86, its lowest point since February 2024.