Susie Violet Ward, the Director of Bitcoin Policy UK, has raised concerns regarding Michael Saylor's promotion of the STRC perpetual preferred stock. She claims that the promotional video made STRC appear as though it guarantees risk-free returns of 11.5% annually, which is misleading.
Understanding STRC is crucial for potential investors. STRC, also called "Stretch," is not akin to a traditional savings account. It is a type of perpetual preferred stock, designed to pay a variable monthly dividend that currently approximates 11.5% annualized returns. This stock represents one of several unique offerings from the company known as Strategy, previously recognized as MicroStrategy. Its primary function is to help the company acquire capital while protecting its common equities from dilution.
Saylor's ambition for STRC is to transform it into a leading credit instrument globally, leveraging Strategy's substantial Bitcoin reserves to provide an illusion of safety. As of May 31, 2026, the company held a significant reserve of 843,706 Bitcoin.
Despite these reassurances, investors should carefully review the details before proceeding. STRC holders do not hold a direct stake in Strategy's Bitcoin assets, contributing to their subordinate position in the capital structure relative to conventional creditors. The dividends are based on company performance rather than direct Bitcoin collateral.
Additionally, Strategy’s recent move to sell some Bitcoin to fund capital distributions raises further questions. From May 26 to May 31, 2026, the company sold 32 Bitcoin for approximately $2.5 million to support its dividend obligations, underscoring a potential conflict with its brand identity as a Bitcoin accumulator.
For those contemplating an investment in STRC, it is essential to recognize the following points. First, investors do not have a direct claim on the Bitcoin held by Strategy. Secondly, they rank below senior creditors in the capital structure. Third, the dividend is variable and hinges on the ability of the company to generate adequate revenue or divest assets for obligations.
STRC lacks a defined maturity date, meaning there is no guaranteed timeline for investors to recoup their principal investment. In the event of liquidation, it ranks below senior debt, making thorough due diligence critical for any potential investor.