This video explains MicroStrategy's new financial instrument, STRC (pronounced "Stretch"), a perpetual preferred offering designed to attract capital from fixed-income markets. The speaker, Forest Total, analyzes STRC's mechanics, potential market impact, and its role within MicroStrategy's broader Bitcoin acquisition strategy.
STRC is a senior security: It's senior to other MicroStrategy securities (STRF, STRK, STRD) and MSTR common stock, increasing its collateralization based on lower securities' issuances.
Algorithmic Stability: STRC aims for a stable $100 share price through algorithmic issuance and repurchase of shares based on market demand.
High-Yield Dividend: STRC offers a 9% annual dividend (initially), payable monthly, designed to outperform money market funds and compete with other fixed-income investments. The dividend rate is subject to adjustments, with a maximum downward adjustment tied to the one-month SOFR rate. Unpaid dividends compound monthly.
Significant Market Potential: The video highlights STRC's potential to attract capital from money market funds ($7.44 trillion market), short-term Treasury bills ($5.8 trillion), and USD bank accounts ($18.3 trillion), funneling significant capital into Bitcoin.
MicroStrategy's Bitcoin Strategy: STRC is presented as a key component of MicroStrategy's strategy to acquire more Bitcoin, potentially reducing reliance on convertible bonds.
