Strategy’s ‘Stretch’ Preferred Falls Below Par as Bitcoin Weakens; Strive’s SATA Draws Interest
Summary
- Strategy’s perpetual preferred stock Stretch, issued by the world’s largest corporate Bitcoin holder, fell below its $100 par value as Bitcoin weakened.
- Strategy’s roughly $871 million in cash would cover only about six months of its annual $1.7 billion preferred dividend obligations.
- Rival Strive’s perpetual preferred SATA offers an approximately 13%% dividend yield, has traded steadily near par value and has posted a 110%% gain over the past three months.
Forecast Trend Report by Period
Strategy’s perpetual preferred stock Stretch, issued by the world’s largest corporate Bitcoin holder, has fallen below its $100 par value.
CoinDesk reported on May 29 that Stretch closed at $98.57 on May 28 after dropping as low as $97.11 intraday. The decline came as Bitcoin slid to the $73,000 level the same day.
Stretch is a perpetual preferred stock that Strategy launched in the second half of last year to help finance Bitcoin purchases. Strategy needs the shares to trade near their $100 par value to raise additional capital through at-the-market offerings.
The focus is now on Strategy’s cash position. The company is estimated to hold about $871 million in cash.
Its annual preferred dividend obligations total about $1.7 billion. At that pace, its remaining cash would cover roughly six months of dividend payments.
Investors are also watching perpetual preferred shares issued by Strategy rival Strive, a Bitcoin digital asset treasury company. Strive’s perpetual preferred stock, SATA, offers a dividend yield of about 13%.
CoinDesk reported that SATA has traded steadily near its $100 par value over the past two weeks. Over the past three months, Strive shares have climbed about 110%, while Strategy shares have risen 12%.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul
