On March 10, 2021, Strategy (formerly MicroStrategy) founder Michael Saylor encouraged investors to use leverage and even mortgage their homes to buy bitcoin ($BTC). Five years later, the company’s CEO Phong Le is talking about mortgages again, but this time in relation to buying Stretch (STRC) instead of $BTC.
Le talked about STRC, a stock with no guarantees of principal repayment that currently pays variable, 11.5% annualized dividends, on Natalie Brunell’s popular Bitcoin show.
“It almost looks like a paycheck, right? It’s just coming in,” Le claimed in an incredible comparison of income to STRC’s variable dividends that his board of directors may suspend at any time.
He also recommended STRC to people who “might have a mortgage to pay, or they might have utility bills to pay, or a car bill.”
Then came the incredible changeover from Saylor’s mortgage-for-$BTC to CEO Le’s new mortgage-for-STRC. He told brunell:
“I, just last week, bought $250,000 of STRC. The reason I did it was just to sort of go through the experience, which I enjoy doing.
“I have monthly obligations. I have a 1.75% 30-year mortgage, right? And if I can, instead of paying down that mortgage, put it into an instrument that pays me 11.5%, that’s 10x my mortgage rate.
“I’m essentially making money by taking the money, putting it into STRC, getting 11.5% percent, and paying off my 1.75% mortgage.”
Le mortgages for STRC instead of $BTC
In the same video, Le also claims that STRC “grew faster than the iPhone,” mistakenly claiming sales of its stock are somehow “revenue” growing faster than Apple’s early sales of physical products.
However, raising capital by selling stock doesn’t generate revenue, which is a controlled accounting term.
As with Saylor, the advice comes from a lavishly compensated executive who wants to “just sort of go through the experience.”
Like Saylor, Le doesn’t need dividends of a $250,000 mortgage relative to his annual compensation that has exceeded $15 million.
Le himself disclosed the uncomfortable reality of who’s receiving this mortgage advice. He recently admitted that roughly 80% of STRC stockholders are retail investors.
That figure, which he cited with apparent pride, means the population most exposed to financial hardship and chasing risky, high yields — as Le described, people with mortgages to pay, utility bills, and car payments — represents the overwhelming majority of STRC’s investor base.
DeFi traders are stacking risks on top of Strategy’s risky STRC
Unfortunately, Le didn’t highlight the language that Strategy itself places on its own STRC information page.
Cash dividends aren’t guaranteed, and STRC has no guarantee of principal repayment. The board can suspend payments at any time and adjust the dividend interest rate at will.
Le compared STRC’s monthly dividend checks to a paycheck. However, unlike a dividend, a paycheck can’t be cancelled when things are going poorly at Strategy.
