Another piece of strategy ( MSTR ) Executive Chairman Michael Saylor’s playbook appears to be taking shape after the company’s perennial favorite, Stretch ( STRC ), hit an all-time high of $100.10 on trading volume of 1 million shares.
The milestone is important because it enables Strategy, the largest holder of bitcoin to use its at-the-market (ATM) offering against STRC to buy more of the largest cryptocurrency. Described by the company as a short-term, high-interest credit instrument, the STRC currently offers an annualized yield of 10.5%, paid monthly in cash.
The ATM, established on July 31, had been suspended because the instrument was not trading at par. The company raised STRC’s dividend rate, initially to 9%, to help push the trading price toward the $100 par. According to the most recent 8-K filing, the company has $4.2 billion in available capacity for equity issuance.
Strategy has already used ATM sales on its other three perennial favorite products — STRK, STFR and STRD — as well as its common stock to fund bitcoin purchases.
MSTR common stock is down 15% this year to around $253. With multiple to net asset value (mNAV) hovering near 1.3, Saylor’s ability to successfully issue perpetual preferred stock will be key to continuing the company’s bitcoin accumulation in a non-dilutive manner.
STRC is up 0.5% in premarket trading at $100.50 a share, while MSTR is down 1%.
