We NEED to Talk About STRC BREAKING (What Does This Mean For Bitcoin?) | EP 1528

**Optimistfields** (0:03)
Today is one of the worst days for Michael Saylor's stretch STRC product. And even if you don't hold stretch, you need to be watching what's happening, because of course, strategy is one of the biggest holders of Bitcoin in the world. And everyone is wondering, is Michael Saylor finally in trouble? And the real big haters, you know, the trolls out there, are saying that Saylor's Ponzi might be over. Now, that might be a stretch. I'm being hyperbolic, I know. But in the context of what we've seen in the last couple of weeks, did BlackRock, JP Morgan and of course, Strive's income product finally break stretch's monopoly?
It's not the first time we've seen stretch DPEG like we're seeing right now, but I think everyone is wondering now, in the face of the recent Saylor controversies, in particular, the never sell your Bitcoin one, are people starting to lose faith in strategy? I think that's the broader conversation. Yes, I know, I know, we're doing a little clickbait today. Hey, caught in 4K, it is what it is. But let's get into this, okay? So first of all, let me start with just what strategy says stretch is, if you aren't familiar with what stretch is. So stretch, the short duration high yield credit. Stretch or STRC is strategy's perpetual preferred stock that currently pays 11.5% annual dividends, payable semi-monthly in cash. And STRC's dividend rate is adjusted monthly to encourage trading around STRC's $100 par value and to help strip away price volatility.
Course listed on NASDAQ. You can see current price $91, well, 91 and 14 cents. Now, what is probably the most interesting aspect about this is that they did just change the monthly dividend payments to semi-monthly or bi-monthly. I think I saw Saylor, I have it here, you know, asking everyone on Twitter, what should we call it? So it looks like Saylor isn't really freaking out about this.
But if you're looking at this chart, it is pretty brutal here. You can see it drop. It's dropping really hard. It's dropping like a hot potato right now. Though, as you can see, there's been multiple drawdowns before, and Stretch has been able to recover.
Now, what I find to be the most interesting part about this story is, I don't want to say this time is different, because, you know, every time I say that, it's never different. But what did we see and we covered yesterday? BlackRock is also now trying to create an income yield generating product that they just launched yesterday, Brita, or sorry, Bita, Brita, the filter, Bita, B-I-T-A. And I think the biggest thing that might be thrown a wrench in this is what we're seeing with Strive or the SATA product. So we all know Stretch has been cleaning up. They've been scooping up so much Bitcoin recently. This turned into one of the biggest ways for strategy to acquire Bitcoin recently, and it seemed like it was on fire. It seemed like nothing could stop this. Now, of course, like I said, we have seen Stretch DPEG before and it's recovered.
And this is just part of the game. But usually it recovers before the dividend payment. Usually it closes around the dividend payment, right? And that was on the 15th. That was actually on Monday and we haven't seen that yet. Now, I think in the face of what we're seeing with Strive or SATA, where of course, they're doing daily dividends, it does seem as if SATA, sorry, Strive is taking a lot of the market share away from Stretch. And I think that might be part of the reason here. Now, there is a pretty good article here on Yahoo Finance Strategies, Dividend Paying Stock Crashes. So we'll read a little bit of this so you can get a little bit of the context here. And then we will kind of compare this to what's going on with Stretch right now and what's going on with Strive.
And we'll see kind of how the market is going to play out. Now, of course, there is a transition period here for Stretch. Again, it is going to go to payments paid out twice a month starting July 1st. Sorry, July 1st. Well, I guess ending June 30th and starting July 1st. So anyway, strategy, dividend paying preferred stock, STRC is crashing as investors worry about the sustainability of the monthly distribution. Again, this all started, this saga all started a few weeks ago when Saylor bought about 1.5 billion of his own bonds. And everyone was confused. Everyone was wondering like, wait, why would he do this move? Like, what is the thinking here? Did Saylor get himself in trouble? Is Saylor above his skis now? Because there was the big conversation, the big meme going around was, look, Saylor's got enough cash on hand to pay back these dividend payments for like years. And then they did this buyback, you know, this bond buyback, and it really threw a wrench in all the math.