STRC trading well below its $100 target level simply makes Strategy’s bitcoin acquisition and financing engine less efficient because the company can no longer issue the preferred stock on attractive terms, as Benchmark analyst Mark Palmer previously noted. That is very different from suggesting that the model fails.
The bigger issue is trust rather than solvency. STRC was marketed as a low-volatility income product designed to trade near $100, and its sharp decline has undermined investor confidence.
The real damage is credibility, argues Two Prime CEO Alexander Blume, not the company’s ability to keep paying dividends. And so it may be confidence that prevents STRC from returning to its $100 par value.
Michael Saylor’s repeated reversals and deviations from his stated plans have shattered investor confidence, leading to a dramatic collapse in Strategy’s ( MSTR ) ecosystem, Blume told CoinDesk on Thursday.
“Beyond any spreadsheet or logic, markets are about trust, especially when your investor base is retail-centric,” Blume, who heads the SEC-registered bitcoin-focused investment adviser, said in a Telegram announcement.
“Saylor’s repeated reversals and deviations from his stated plans, along with poor performance by STRC and MSTR, have broken that trust.”
Blume has been sounding the alarm for several months. In March, as Strategy’s perennial favorite still rose early, Blume warned: “There is no free lunch, a product that pays more than 6% over Treasuries must come with additional risk.”
