Another piece of Strategy (MSTR) Executive Chairman Michael Saylor’s game plan appears to be taking shape after the company’s perpetual preferred stock, Stretch (STRC), hit an all-time high of $100.10 with trading volume reaching 1 million shares.
This step is important because it allows Strategy, the largest holder of Bitcoin to use its market offering (ATM) against STRC to purchase more of the largest cryptocurrency. STRC, described by the company as a short-duration, high-yielding credit instrument, currently offers an annualized return of 10.5%, paid monthly in cash.
The ATM, created on July 31, was suspended because the instrument was not trading at par. The company increased STRC’s dividend rate, initially to 9%, to help push the trading price toward the par value of $100. According to the latest 8-K filing, the company has $4.2 billion in capacity available for issuing stock.
Strategy has already used ATM sales on its three other perpetual preferred products – STRK, STFR and STRD – as well as its common stock to fund bitcoin purchases.
MSTR common stock has fallen 15% this year to around $253. With a multiple to net asset value (mNAV) near 1.3, Saylor’s ability to successfully issue perpetual preferred stock will be key to continuing the company’s bitcoin accumulation in a non-dilutive manner.
STRC is up 0.5% in premarket trading at $100.50 per share, while MSTR is down 1%.
