Why is Saylor Pushing on the STRC? Explained

Strategy, the company led by Michael Saylor, famous for buying huge amounts of Bitcoin, is now changing its strategy slightly. Analysts still support strategy completely.

The big change is that Saylor used to put 100% of money into Bitcoin. Now he says that

“Maybe the best way to buy the most bitcoin is not to buy the most bitcoin.”

This means that keeping some cash reserve now helps them buy more Bitcoin later, safely. Now their new main focus is shifted towards STRC. STRC is a type of stock run by Strategy. They named this stock preferred stock. A special kind of share that pays fixed income. A kind of like a bond. Right now, STRC’s prices are unstable.

Saylor’s first-ever goal is to get STRC’s price back to $99 to $100. This was called PAR, its proper value. STRC matters so much because more institutions, like big investors and funds, are buying it.

This jumped from $1.1B to $3.1 billion in a few months. Institutions now own 29% of it, up from 22%. Strategy uses STRC as a tool to raise money to buy more Bitcoin. So keeping it stable is critical.

Some analyst opinions were as follows:

TD Cowen & Benchmark still rate it a Buy. Benchmark lowered its price target ($570 → $435) because it now expects Bitcoin to be worth less by year-end ($125K → $100K). TD Cowen kept a lower target too ($260), already cut earlier.

Saylor says this was a temporary dislocation price mismatch, not a real problem, and expects it to fix itself. The Bitcoin price dropped over 40% compared to last year. Because of this, Strategy went from a $10 billion profit to last year's. An $8.2 billion loss this quarter is mostly paper losses, unrealized since they still hold the bitcoin.

Bitcoin holdings grew to 846,000 BTC, then they slightly sold some, ending at 843,775 BTC. They bought 175,000 BTC this year while only selling 3,600. This means they’re still overwhelmingly buyers, not sellers.

Cut debt by 18%, which is down to $6.7 billion. Also raised cash reserve by 12% up to $2.4 billion, later reported as $3.75 billion, enough to cover payments for about 2 years.

MicroStrategy's stock, MSTR, closed at $97.70, then fell 5%+ the next day. Strategy is easing off its all-in on Bitcoin approach and building up cash instead. Mainly to stabilize a key stock STRC that helps them raise money.

A big paper loss this quarter because Bitcoin’s price dropped. They are still buying way more Bitcoin than they’re selling. Analysts still support the company’s strategy. Though some have lowered their price expectations.