Strategy's STRC stays below $100 for five months despite buybacks
Strategy's STRC has not reached its $100 target since May
Strategy has been trying to push STRC, its variable rate perpetual stock, back to its $100 par value. Per the source, STRC has stayed below parity since May 15 despite repeated purchases worth hundreds of millions of dollars.
The company's stated goal was to get STRC back to $100. According to the report, that goal has not been met, and STRC was still trading below $100 at the time of writing.
What the source says about the attempts
- Strategy bought back a significant amount of available STRC shares.
- The company also issued new MSTR shares and occasionally sold a small part of its large bitcoin holdings as part of the effort.
- Those efforts have not brought STRC back to its $100 target, per the report.
- STRC remained under $100 as of writing.
MSCI decision added pressure
According to the source, Strategy and its variable rate perpetual shares were hurt by an MSCI announcement that MSTR is considered a “non-operating business” and will be delisted from its Global Investable Market Indexes.
Earlier setbacks described in the report
The source reports that in September, the failure of the CLARITY Act to pass in the US coincided with MSTR falling 7% and STRC dropping from about $0.99 to $0.97.
Before that, the source says both Strategy and its perpetual shares fell in value after the company reported an $8 billion loss in its Q2 earnings report.
What is still unclear
The source states it is unclear what to expect from MSTR when it reports Q3 numbers on October 29. The source says it will cover the earnings call and report the results.
Why this matters
STRC is designed to trade at a $100 par value. Its continued trading below that level shows that Strategy's buybacks and share sales have not achieved the company's stated aim, according to the report. The MSCI index change and the other events described may have added to the difficulty, but the source does not confirm the exact cause of STRC's price level.
Sources
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