Michael Saylor wants to have his Bitcoin and spend it too. The Strategy executive chairman appeared on Middle Eastern television on June 5 to lay out a financial model that sounds almost too elegant: sell a tiny sliver of your Bitcoin to fund dividends, then use capital markets to buy back even more than you sold.
The pitch centers on Strategy’s “Stretch” (STRC) variable-rate perpetual preferred stock, which carries a 12% annual dividend paid monthly starting July 1. Saylor’s argument is that issuing or selling credit instruments equal to just 1.4% of the company’s capital assets can sustainably fund those distributions while simultaneously growing the firm’s Bitcoin treasury.
The math behind the magic trick
Here’s the thing about Saylor’s model. It requires Bitcoin to appreciate by roughly 2.3% annually for the whole machine to keep running. The logic works like this: Strategy sells a small amount of Bitcoin to cover dividend payments, then raises capital through debt or equity instruments to purchase far more Bitcoin than it just sold. Saylor claimed that for every batch of Bitcoin sold to fund dividends, the company can acquire 10 to 20 BTC through subsequent capital raises.
In practice, this is already happening. In late May, Strategy divested 32 BTC for approximately $2.5 million to fund STRC distributions. That’s a rounding error for a company holding over 840,000 BTC in its treasury.
