Strategy's STRC Experiences Ex-Dividend Drop

Strategy's equivalent of the yield-bearing stablecoin – a so-called "preferred credit instrument" that trades under ticker symbol STRC – came under price pressure today after going ex-dividend, despite mounting social media traction.

What's the Scoop?

• Ex-Dividend Date: This morning Strategy's STRC went ex-dividend, meaning investors who purchase the credit instrument on or after this date will not receive the upcoming shareholder dividend payment, scheduled to be made on March 31. Correspondingly, price (as it has done every ex-dividend day) fell, reflecting lost income potential. STRC closed the day 26 cents below its $100 target price, failing to trade the key threshold during regular trading for the first time in more than two weeks.
• Elevated Presence: STRC has emerged as a centerpiece of Strategy's playbook, contributing $377M to last week's BTC buy and accounting for nearly one-thirds of the capital raised (the biggest offering since the instrument's IPO). In a recent post to X, Strategy founder Michael Saylor pitted STRC (with 11.5% dividends) against lower-yielding money markets and bank accounts, meanwhile, Strategy CEO bull posted today that the company's "digital credit vehicle achieved escape velocity this week."
• Layered Offerings: Earlier this week, Strive (a fellow BTC DAT) announced its purchase of $50M STRC. Separately from Strategy, Strive has its own preferred credit instrument, which trades under the ticker symbol SATA and yields 12.5% annually. Strive has raised $258M of net proceeds from two rounds of SATA offerings, but has been unable to tap the credit line since January 16, when shares last traded their $100 target.

What's the Take:

Although a minor STRC drop on ex-dividend day is nothing to fear, should the credit instrument fail to recover its $100 threshold, Strategy will be unable to raise new money using this instrument.

While Strategy's can attempt to bolster STRC's price by raising the dividend rate if prices fail to recover, this situation can quickly devolve, demanding an increased amount of tomorrow's money to fund today's buys.