Buried beneath the Strategy headline is one of the more interesting signals of the week. SATA, Strive’s perpetual preferred stock, briefly returned to its $100 par value on Thursday for the first time in two months. SATA currently pays a 13% annual dividend through cash payments of $0.0516 per share every business day.
Par matters because SATA includes an at-the-market issuance program. When the security trades at or above $100, Strive can issue preferred shares continuously without selling them at a destructive discount, then use the capital to acquire bitcoin. Strive describes the product as a way to capture the spread between its financing cost and bitcoin’s potential long-term return. Strategy’s STRC uses a similar flywheel, although STRC remains below par at roughly $95.62.
Bitcoin strengthens the preferred securities. Par reopens issuance, and issuance buys more bitcoin. SATA is turning again, with STRC getting closer. That is structural demand hiding inside a boring preferred stock.
Happy Friday.