Stretch ( STRC ), the perpetual preferred stock issued by Strategy ( MSTR ), the world’s largest corporate owner of bitcoin, regained its par value of $100 during Thursday’s trading session, giving the company room to raise funds to add to its stockpile of the largest cryptocurrency.
The recovery took nine trading days after the March 13 ex-dividend date, when buyers of the stock no longer qualify for the next payout. The prices of ex-dividend stocks typically fall to reflect the cash distributed to the former shareholders.
At its core, STRC works by adjusting the yield to control the price. If shares trade above $100, the company may trim the dividend to cool demand. If shares fall below that level, it may raise dividends to attract buyers. By keeping the price anchored, the firm issues new shares close to par, bringing in capital that is then used to buy bitcoin.
The return to par this time was slightly faster than the historical average of about 10 trading days for STRC, according to STRC.live.
STRC operates as a short-term, high-yield credit instrument offering an annualized dividend of 11.5% monthly. This structure helps encourage trading near its par value of $100, allowing the company to use stock market (ATM) issuance to raise capital for additional bitcoin acquisitions.
In comparison, SATA, the equivalent tool issued by bitcoin tax company Strive (ASST), offers a higher yield of 12.75%. Currently priced at $99.25, it is also approaching par value.
Strategy bought 1,031 bitcoins last week for a total price of $76.6 million, or $74,326 per share. coin. However, the size of that purchase was far lower than recent purchases, and STRC was not on par with last week’s bitcoin buying.
The firm’s holdings now stand at 762,099 bitcoins, purchased for approximately $57.69 billion, at an average price of $75,694 per bitcoin.
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