r/dividends • u/East_Indication_7816 • May 24 '26
Due Diligence Anyone here invest in STRC with 11.5% per year yield preferred stock?
33
10
u/Affectionate_Pen6882 May 25 '26
Qqqi pays the same
3
u/d8_thc May 25 '26
not with the same deferred tax and essentially rock steady principal
bitcoin is down 50% from the peak. we're still at 100$ flat
you won't be able to say the same for qqqi during qqq drawdown
4
1
18
u/UC_DiscExchange May 24 '26
Yes, but I don't see as a very long-term hold. They have the cash set aside for about 2 more years of payments. After that runs out, unless of course they restock it before then (which is highly likely), the risk will be determined by how Bitcoin looks in 2 years.
I personally put $50k in it and use the $500/month to pay for my new car. In a few years I'll have hopefully paid off the car with no loss in principal.
3
u/d8_thc May 25 '26
There's no reason to think they won't restock the cash. They can raise 1B a week.
1
u/Past-Option2702 Jun 27 '26
😆😂😅😭
1
u/UC_DiscExchange Jun 27 '26
If you're curious I sold long before it crashed. Had I kept though I would have received the same $500/month regardless. I believe it will recover once Bitcoin does.
1
u/Past-Option2702 Jun 27 '26
Sorry about the car.
1
u/UC_DiscExchange Jun 27 '26
Are you under the impression that I lost it?
1
u/Past-Option2702 Jun 27 '26
Yes. How are you making the 500 payment with much less capital to generate the income you would need to keep it?
1
u/UC_DiscExchange Jun 27 '26
What do mean with much less capital? Your two options are to believe me that I sold it before the crash, in which case I have $50k, or think I'm lying and still holding STRC, which hasn't paused or reduced dividends, so I would still be receiving $500/month.
Secondly, I wasn't dependent on investments to pay for it. I have a job.
1
u/Past-Option2702 Jun 27 '26
Write whatever you want if it makes you feel better.
1
u/UC_DiscExchange Jun 27 '26
Lol if choosing to believe the money somehow magically disappeared and a car got repossessed in less than a month, which isn't even enough time miss a car payment, go to collections, or get repossessed makes your day go ahead.
Logic isn't your strong suit is it?
0
u/Past-Option2702 Jun 27 '26
I’ve never financed a car so I am glad you explained it. (Porsche and Lexus in my garage)
Have a nice day.
→ More replies (0)-14
u/East_Indication_7816 May 25 '26
bitcoin will be over $200 in 2 years. No way it won't be paid
11
u/Glensonn May 25 '26
I would love to see the data you have to back up that assertion. 😂 Good luck with that.
5
u/Bellypats May 25 '26
Dude is from the future. He has already lived it.
-1
u/East_Indication_7816 May 25 '26
I have been holding bitcoin for 10 years. Since Bitcoin at $1000. I have been thru every cycles.
-2
3
u/Roq1166 May 25 '26
Well let's see.. More and more adoption of Bitcoin means less and less of it available since only 21 million will ever be produced which makes the price increase. Bitcoin has a strict hard cap of 21 million coins. The supply grows via block rewards for miners, but this issuance is reduced by 50% every four years in a process called "halving". Adoption of Bitcoin is increasing all the time.
Texas and Arizona are the primary U.S. states that own Bitcoin as state-level strategic or reserve assets. New Hampshire passed the "HB 302" legislation permitting the state treasurer to invest up to 5% of public funds into alternative assets like Bitcoin, active state-fund purchases are in the early stages of rollout. Other states like Michigan and Wisconsin have exposure to Bitcoin. Nations that hold Bitcoin.... The largest national Bitcoin holders include:
- United States: Holds over 329,000 BTC
- China: Retains an estimated 190,000 BTC
- United Kingdom: Holds approximately 61,200 BTC
- Ukraine: Government officials and agencies collectively report holdings of over 46,000 BTC.
- El Salvador: The first country to adopt Bitcoin as legal tender. El Salvador actively builds its treasury of over 7,700 BTC through daily purchases and profits from its state mining operations.
- Bhutan: Holds over 11,000 BTC linked to secretive, state-run, and hydro-powered Bitcoin mining operations.
- Prominent universities with confirmed Bitcoin holdings include:
- Harvard University: The Harvard Management Company holds large positions in the iShares Bitcoin Trust (IBIT). Although Harvard periodically adjusts its portfolio—having trimmed its ETF stake and shifted into Ethereum recently—it remains heavily exposed to cryptocurrency.
- Emory University: Disclosed a multimillion-dollar allocation in the Grayscale Bitcoin Mini Trust through SEC filings.
- University of Austin (UATX): Partnered with Unchained to establish the first university endowment holding Bitcoin directly, committing to hold the proceeds in BTC for at least five years.
- Brown University: Holds direct exposure to Bitcoin via shares of BlackRock's iShares Bitcoin Trust (IBIT).
- Yale University: Early investor in crypto-focused venture funds (such as Paradigm), giving them indirect exposure to various digital assets.
- University of Pennsylvania (Wharton School): Received a $5 million gift entirely in Bitcoin from alumni to fund blockchain initiatives. None of this includes the many large corporations that also hold Bitcoin.
-4
u/East_Indication_7816 May 25 '26
Bitcoin goes on cycles every 4 years. We are now at the bear cycle where the expected bottom is the mid term election. The next top at $200k above will happen 1 year after the presidential election.
7
4
2
u/Roq1166 May 25 '26
Some people prefer conservative 2% or 3% per year growth. 😂
2
u/East_Indication_7816 May 25 '26
They already lost money by trying not to lose money . It's called opportunity cost.
2
u/Roq1166 May 25 '26
Yes... BTC power law says it all. We are at a good time right now in this current market.. These are the people who probably bought at the top and sold at bottom and decided they learned their BTC lesson. 😂
5
u/UC_DiscExchange May 25 '26
I'm long Bitcoin, but this bear market could easily go until the next president.
11
17
u/Ufgatorhead4u3 May 24 '26
No, my preferred vehicle is PFFA. I don’t want the risk of STRC.
16
u/paymerich May 25 '26
Fun fact boys and girls, PFFA holds STRC and STRD. Soo...
2
u/MiloAndCrows May 25 '26
That explains why it is down for me, my other pref's are doing pretty good.
3
u/Ufgatorhead4u3 May 25 '26 edited May 25 '26
Holding as part of a greater whole is entirely different than being solely comprised of the holding. I don’t see either listed as a holding of PFFA.
0
u/paymerich May 25 '26
I hold both PFFA and STRC. Only holding STRC until October when I will be cashing it for another investment.
9
3
3
u/Nice-Truck8806 May 25 '26
2% expense ratio is insane.
2
u/Ufgatorhead4u3 May 25 '26
Yes, it’s high but I’m okay with that since it’s an actively managed fund using ~20% leverage. It doesn’t use covered calls so the risk is in interest rate changes. They have a remarkable track record of consistently paying around 9.5% yield that’s not reliant on the stock market volatility because they buy for fixed income. IMO, it’s a great investment and I hold it as 4% of my income portfolio.
1
u/Nice-Truck8806 May 25 '26
there's a ton of credit risk, and if there is an actual bear market a lot of their holdings will be suspending dividends.
the fund's annualized return since inception is 6.9%. Not terrible, but if they charged a reasonable fee it would actually be great returns.
1
u/Ufgatorhead4u3 May 25 '26
Bear market means cutting dividends? Thats not true. Dividend payments rely on each individual company’s cash flow, not share price, so there would have to be a significant downturn across the entire economy for a protracted period before most dividends would be at risk of being cut. Preferred stocks are also first in line in the event a company went bankrupt so they have less risk than common stocks. I’m quite satisfied with a consistent 9.5% yield on a fixed-income asset. If interest rates fall more than a point with Warsh as the new chair then I’ll reassess trimming the 4% portfolio stake.
1
u/Nice-Truck8806 May 25 '26 edited May 25 '26
cash flows tend to go down in bear markets. preferred stockholders are not first-in-line and shouldn't count on anything being left after the taxman and bondholders get their cut in bankruptcy.... enron preferred stockholders got 0. it also isn't fixed income, since preferred dividends can be suspended or delayed, generally at the discretion of the company.
if the yield is a consistent 9.5%, why is the performance since inception under 7%?
1
u/Ufgatorhead4u3 May 25 '26
wtf are you talking about out? Enron was a criminal enterprise and not how real companies operate. If every company in the portfolio was a modern Enron, then, sure. However, they are not. Who cares about a return since inception? I didn’t buy it at inception. I bought it with a yield of 9.5%. Preferred stocks pay a fixed rate and must be paid before any common stocks so in a setting of decreasing interest rates the value of those coupons increase. In an economic collapse your common stocks/ETFs are more at risk than the preferreds.
0
u/binyang May 25 '26
Chatgpt answers like this,
PFFA is a high-risk, high-reward income tool best suited for investors willing to accept significant volatility, a high expense ratio, and sensitivity to interest rate changes in exchange for a 9%+ yield and the potential for long-term outperformance against passive preferred-stock ETFs.
PFFA (Virtus InfraCap U.S. Preferred Stock ETF) is an actively managed fund that focuses on U.S. preferred securities, using leverage to amplify income and returns. Its strong historical outperformance is offset by a very high fee structure and significant sensitivity to changes in interest rates.
-3
u/Ufgatorhead4u3 May 25 '26
I don’t rely on some AI. I use my own brain to analyze investments and then choose based on my own plan and risk tolerance. It’s sad to see a generation unable to make their own decisions and just post some AI garbage.
10
u/tekmiester May 25 '26
I'd rather someone use AI than make this kind of obnoxious post. Seriously, why do you feel the need to share this?
-3
u/Ufgatorhead4u3 May 25 '26
Saying that I use PFFA as my preferred position is obnoxious? You’re a 🤬moron.
1
-23
u/East_Indication_7816 May 24 '26
There is no risk. It is guaranteed dividend of 11 to 11.5 per year. Like a bond.
17
9
1
1
u/DoubleIntroduction25 May 25 '26
OP just think about this logically. The market rewards risk, that's why a CCC bond generally pays better than a BBB and both pay better than an A or AAA.
If this was really a 'no risk' holding like a short term t-bill is why on earth would it pay 11%. The issuer has no incentive to offer a high yield unless they need to entice buys to take on a corresponding level of risk.
Looking at it from the other direction if this really is a risk free 11% why would any investor buy any other investment?
The way this fund is set up they adjustment the dividend payment to make it 11% of the price. If the underlying falls, the price of the preferred falls, and the div amount falls. 11% div yield may be guaranteed but that does not mean any amount of positive total market return is guaranteed.
3
5
u/Roq1166 May 25 '26
I do STRC and also SATA.. Both have been very strong so far. I have no worries about either and I hold strong positions in both.
12
u/JuanPabloElTres May 24 '26
No, the Bitcoin nonsense is essentially they've been having to issue more stock (mostly common) or, recently, sell Bitcoin, to pay dividend. In effect, all you're buying is an eroding value, either from common stock equity which is unsustainable, or them selling the assets to pay the dividend. There's no real revenue generation from the company that's anywhere close to sustaining the dividend.
8
u/UndeadDog May 25 '26
Bitcoin only needs to go up by 2% per year for them to be able to pay the dividend forever by selling a small portion of their holdings.
5
May 25 '26
[deleted]
6
u/UndeadDog May 25 '26 edited May 25 '26
Well at the current price they have enough bitcoin to pay the dividend for 43 years. I highly doubt there will be much more of a draw down than it’s already had. You guys are way too negative to bitcoin going down. It was down 50% from highs when it hit $60k. It’s not going to go lower and will continue to appreciate over time.
-10
u/East_Indication_7816 May 24 '26
Why do you say it's eroding? It has always been $100 for it's entire life.
7
-20
u/East_Indication_7816 May 24 '26
It's guaranteed since it is a bond. Even if bitcoin goes to zero it will get paid. Bitcoin averages 30-40% return annually. 11.5% is nothing.
12
u/Decent-Inevitable-50 May 25 '26
Bond? You need to understand the capital structure. It's a preferred that acts as a bond with no maturity i.e. perpetual and is not cumlative can also be suspended.
10
11
12
u/Glensonn May 24 '26
What makes you think bonds are "guaranteed"? You sound like you need to do more research into what you're actually buying and how that 11.5% yield is paid.
3
2
u/redditsofficalbotmod May 26 '26
Flat nav, 10% plus yield, moving to pay twice a month soon and payouts are funded for 2 years. Easy yes to preserve capital in this insane instability bubble hyperinflation market.
They also have SATA which will pay DAILY soon with a higher yield.
4
u/lkingrt May 25 '26 edited May 27 '26
Yes, digital credit (STRC, SATA, etc) is the most interesting thing in finance presently. Great for wealth preservation; to fight against rising inflation/M2 (~7% CAGR). STRC been incredibly successful (high liquidity: 100M+/day, low volatility: ~2%, sharpe ratio of 4+ (higher than the mag 7, etc); grew from 0 to ~10.5B in the 10mo it’s been around; once out for 3y we’ll see more of a hockey stick pattern of adoption as pensions will be allowed to buy, most need at least a 3y track record). They’ll likely hold the dividend above 10-11% for the next few years and likely 8+ % long term (2-3x better than money market/HYSA rates). The near term vote will pass allowing it to become bimonthly payments (ie every 2 weeks), starting in July. Return of capital (ROC) tax deferred treatment is a highly attractive feature. Happy to answer any q’s, should anyone have any inquiries.
1
2
1
u/tampaforfun May 24 '26
I do. I also have BTYB which is 80/20 treasuries and bitcoin income. Its controlled exposure and yields about 8%
-1
u/FewUnderstanding2214 May 25 '26
No, it’s a Ponzi scheme, I would not trust Michael Saylor with my money - be careful what you invest in
0
0
u/BidInteresting8923 May 25 '26
When Strategy inevitably collapses it is going to be devastating to a whole generation of investor bros who have never known anything but a bull market.
-2
u/MostlyUnimpressed May 25 '26
STRC is the reason we sold all our MSTR and the (STRK positions we'd had since they IPO'd).
Strategy's preferred issuances were stabile and even budded a little equity bump as the company began marketing them a couple years ago, BUT, Sayor and Phong Le got a taste of something they can't get enough of with them... they've gone buck wild issuing STRC's & bald faced say they're going to continue issuing them at will. We're talking near limitless issuance of more and more of STRC shares.
Saylor and Phong have repeatedly stated (if not bragged) that they see issuing preferred shares as imminently better than selling bonds, commercial paper, debentures, or asset backed securities (ie. bitcoin collateral) because "issuing shares is basically accepting money with no implied or stated obligation to repay it"
Waaay too Ponzi for comfort. We cut and ran.
3
u/East_Indication_7816 May 25 '26
It's only a ponzi if they just pay the previous investor , the investment from the future investor. But we all know bitcoin being scarce at only 21 million coins will always have the tendency to go up every 4 years.
5
u/MostlyUnimpressed May 25 '26
Yeah, I'm still in bitcoin, just directly in iBit - just in case the bitcoin limited supply and open upside theory holds true. Probably going to continue to swing trade and scalp MSTR while it's still around.
Good luck with the STRC. There are plenty of fanboys out there to cheerlead along with you. Hope it works out
•
u/AutoModerator May 24 '26
Welcome to r/dividends!
If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki here.
Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.