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Question on Strategy’s STRF: Right now the yield on stated amount is 10% on $100 - so 10 dollars per share. The stated amount doesn’t change. If through better future credit ratings and bitcoin being perceived as safer in the market, the price of STRF goes up (lets say to 200), then the yield-on-price becomes less (5%). At a certain point the price hits a ceiling where the yield isn’t enough to justify price.

So how does STRF remain an attractive fixed income product at those prices? People who buy now would benefit, but it becomes less attractive over time?

#bitcoin #mstr #strf #saylor

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Discussion

Energy Producer 7mo ago 💬 1

Saylor will issue more shares, diluting back to $100, with proceeds buying btc for benefit of MSTR equity holders

Mathew Joseph 7mo ago

Ahh I see future share issuances of STRF would bring the price back down even if they use the proceeds to buy more BTC, because it’s MSTR stock that benefits from increased BTC per share. STRF is not equity ownership. Thanks for the response! 🙏

Energy Producer 7mo ago

No problem! BTW you should set up a wallet I would have zapped you

Mathew Joseph 6mo ago

I think I’ve finally figured out how to set that up 😂 great suggestion - cheers

VarMur 6mo ago

The way I see it, yield and price always justify each other. STRF remains attractive at those prices because the drop in yield is justified by the increase in credit worthiness. Same with STRD.

What’s also interesting is the interest rate sensitivity of these instruments. What should they be?

#bitcoin #mstr #strf #strd #saylor