Stretch (STRC), the perpetual preferred stock issued by Strategy (MSTR), the world’s largest Bitcoin holding company, reclaimed its par value of $100 during Thursday’s trading session, giving the company room to raise funds to add to its stash of the largest cryptocurrency.
The recovery took nine trading days after the ex-dividend date of March 13, when buyers of the shares are no longer entitled to the next payment. Ex-dividend stock prices generally fall to reflect cash distributed to previous shareholders.
At its core, STRC works by adjusting yield to steer price. If the stock trades above $100, the company may cut the dividend to curb demand. If shares fall below this level, dividends can be increased to attract buyers. Keeping the price anchored allows the company to issue new shares near par, thereby bringing in capital that is then deployed to purchase bitcoin.
The return to par this time was slightly faster than the historical average of about 10 trading days for STRC, according to STRC.live.
STRC functions as a short-term, high-yielding credit instrument, offering an annual dividend of 11.5% paid monthly. This structure helps encourage transactions close to its $100 face value, allowing the company to use at-the-market (ATM) stock issuance to raise capital for additional bitcoin acquisitions.
In comparison, SATA, the equivalent tool issued by Bitcoin Treasury company Strive (ASST), offers a higher dividend of 12.75%. Currently priced at $99.25, it’s also getting close to face value.
Strategy purchased 1,031 bitcoins last week for a total cost of $76.6 million, or $74,326 per coin. However, the scale of this purchase was much smaller than recent acquisitions, and STRC was not up to par during last week’s bitcoin purchase.
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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