Strategy Executive Chairman Michael Saylor is coming under some social media heat for the company’s continued buybacks of its high-yielding preferred stock STRC at just modest discounts to $100 par value.
The company this morning announced the repurchase of $193 million of STRC, bringing total buybacks to nearly $2 billion. Strategy also announced an increase in the authorized buyback amount to $3 billion from $2 billion.
Recall that the buyback program started this past summer following STRC plunging nearly all the way to $70, putting in question the future of the security. In recent weeks, though, STRC has traded mostly above $98, prompting some to wonder if Strategy’s money might not be better spent on buying more bitcoin at what may (or may not) be close to bear market lows, rather than repurchasing preferred stock trading at only a very minor discount.
And others are curious that the fast pace of buybacks (Strategy has less than $9 billion of STRC issued), combined with a 12% dividend yield, hasn’t been enough to fully return STRC to $100.
“You don’t build a market worth trillions without investing billions,” said Saylor on Monday, in response to some of that criticism.
STRC is higher by 1.3% on Monday to $98.99.
The upcoming U.S. midterm elections may have less impact on crypto prices than investors expect, according to Jim Ferraioli, head of crypto research at the Schwab Center for Financial Research.
Schwab found little evidence that rising odds of Democrats taking control of Congress have consistently weighed on crypto returns, even when prediction market trading volumes were high.
While election headlines could trigger short-term volatility, Ferraioli said congressional control has explained little of crypto's recent price movements.
Bipartisan support for crypto legislation and the possibility of continued regulatory progress also suggest that a divided Congress would not necessarily hurt the market.
Troubled neocloud CoreWeave (CRWV) — despite a general risk-on attitude on Monday and an upgrade to buy at Goldman Sachs — has been unable to hold onto early gains.
The stock minutes ago sank below $60 to a new 52-week low after earlier rising to $66.
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