STRC: Sell Now If You Want To Be Able To Sleep Well At Night
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Binary Tree Analytics5.49K FollowersFollow5ShareSavePlay(11min)CommentsSummaryStrategy Inc. is deeply exposed to bitcoin, with its STRC preferred shares highly sensitive to BTC price movements.STRC's variable coupon is meant to keep it trading near par, but market yield now exceeds the coupon, and price has decoupled from par.MSTR funds STRC dividends primarily through new capital raises, a model threatened if bitcoin falls below the $75k average acquisition cost.In a scenario where MSTR cannot raise cheap new capital, the company might be forced to cut payments on its preferred shares. MF3d/iStock via Getty Images Thesis Strategy Inc. (MSTR) is a company that operates in the crypto space, and as per its description: Strategy Inc, together with its subsidiaries, operates as a bitcoin treasury company in the United States, Europe, the Middle East, Africa, and internationally. TheThis article was written byBinary Tree Analytics5.49K FollowersFollowWith an investment banking cash and derivatives trading background, Binary Tree Analytics ('BTA') aims to provide transparency and analytics in respect to capital markets instruments and trades. BTA focuses on CEFs, ETFs and Special Situations, and aims to deliver high annualized returns with a low volatility profile. We have been investing for over 20 years after obtaining a Finance major at a top university.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.