STRC stays below $100 as Jain questions 12% yield

Strategy’s STRC preferred stock has remained below its $100 stated value at $95.31 despite Bitcoin’s rally to about $77,125, prompting Multicoin Capital co-founder Tushar Jain to argue that its 12% dividend does not adequately cover the risk of another deep drawdown. Summary STRC traded at $95.31 on Aug. 21 after falling to $71.25 in June. Jain said the 12% dividend does not compensate investors for STRC’s drawdown risk. Strategy has used Bitcoin and MSTR sales to fund STRC dividends and share repurchases. Bitcoin’s rebound above $77,000 has not returned STRC to its $100 stated value. Tushar Jain said in an Aug. 22 X thread that STRC had failed to return to its stated value during Bitcoin’s recent rally because its dividend remained too low relative to the losses investors had faced. “STRC has not repegged despite this monster BTC rally because the dividend is way too low,” Jain wrote. The Multicoin Capital co-founder said Strategy had marketed STRC as a fixed-income product, yet the security suffered a drawdown of about 30%. According to Jain, investors who accept that degree of downside exposure require a much higher yield as compensation. STRC closed at $95.31 on Aug. 21, accord...