Michael Saylor has a new pitch for Wall Street, and it involves selling a tiny sliver of Bitcoin to make everyone richer in Bitcoin. The Strategy Inc. executive chairman appeared on television to lay out a financial model he believes can fund perpetual dividend payments to preferred stockholders while simultaneously increasing the company’s Bitcoin treasury over time.
The core argument: by issuing credit instruments equivalent to just 1.4% of the company’s capital assets, Strategy can cover its dividend obligations and still come out ahead on Bitcoin accumulation.
The STRC model, explained
At the center of Saylor’s pitch is STRC, short for “Stretch.” It’s a variable-rate perpetual preferred stock that pays an 11.5% annualized dividend on a monthly basis.
The company sells a small amount of Bitcoin, or issues new preferred shares, to cover the STRC distributions. The key claim is that 1.4% of assets is all it takes to keep the machine running indefinitely. If Bitcoin appreciates even modestly, say around 2.3% annually in a conservative scenario, the math gets even more favorable.
