“There’s not a lot of faith in you out there in the business community,” Grama to Worm — Rounders.
Over the past month, Michael Saylor and Strategy have: 1) Lifted the dividend on their preferred stock STRC by 50 basis points to 12.0%; 2) Raised cash reserves on which to pay those dividends to $3.225 billion — enough for nearly two years of payments; 3) Explicitly stated their intention to do whatever it takes — bitcoin sales included — to pay that dividend in perpetuity.
STRC also — as noted by Michael Saylor minutes ago — is the top holding in three leading preferred ETFs: BlackRock’s PFF, Van Eck’s PFXF, and Virtus’ PFFA. Combined, according to Strategy, the three hold more than $750 million in STRC.
And yet, STRC continues to trade at levels the Street might typically describe as highly distressed. At the current $86, STRC has an effective yield for new buyers of nearly 14%.
There’s still a week left in July, but the current price suggests Saylor and team — if following the pattern of other months — might well hike STRC’s dividend by another 50 basis points to 12.5% to entice new investment.
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