Investors Mispricing Risks in STRC Perpetual Preferred Stocks, Analyst Says
- Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) saw a daily trading volume of $1.5 billion, a record high.
- The total notional face value of outstanding STRC shares is approximately $8.5 billion, with a market value around $8.4 billion.
- STRC is currently priced at about $99 per share and offers a variable dividend rate of 11.5%.
- If the authorized issuance cap of $28 billion is reached without an increase, BTC accumulation may slow down.
- Investors face liquidity contraction and interest rate risks as perpetual stocks lack maturity dates.
Matt Dines, CIO at Build Markets, highlighted that perpetual preferred stocks like STRC expose investors to ongoing risks due to their indefinite nature and lack of principal repayment requirements from issuers.
The surge in trading volume for STRC reflects growing interest despite potential risks associated with its structure, as seen in its recent record of $1.5 billion traded in one day.(Source)
