Strategy (formerly MicroStrategy) has announced the launch of Stream (STRE), a new Euro-denominated security, despite Michael Saylor repeatedly promising a new version of its existing security STRC geared toward foreign currency investors.
STRC is Strategy’s high-yield, quasi-pegged preferred stock that trades near a $100 peg and pays tax-deferred, monthly, return of capital (ROC) dividends.
Its annualized dividend is currently 10.5% and fluctuates to try to keep STRC trading near $100.
To the contrary, unlike the fiat-stable retirement breakthrough the company has been promising, Strategy doesn’t intend STRE to maintain any price peg.
Instead, and by Saylor’s own admission, STRE is most similar to STRF — just denominated in euros instead of dollars.
Moreover, in asking for less than €350 million with this initial public offering, STRE is far short of Strategy’s multi-trillion dollar breakthrough that Saylor hopes to serve every accredited investor in the world.
STRE: nothing like a high-yield bank account
On Thursday’s third quarter earnings call, Saylor and his CEO Phong Le spent inordinate amounts of time broadcasting their plans for foreign currency-denominated securities similar to STRC.
Saylor claimed a goal of 1 billion buyers for STRC or its upcoming, foreign currency counterparts.
He has also repeatedly likened STRC to a high-yield savings product, claiming its tax-equivalent yield is 16.5%.
Unfortunately, the fluctuating price and fixed dividend rate of STRE won’t make any progress toward the price-pegged, floating-rate goal of rolling out STRC counterparts for foreign currency investors.
Read more: Why Saylor’s STRC isn’t really a money market or bank account
Both STRE and STRF are perpetual preferred securities that pay a fixed, 10% dividend annually. Both fluctuate in price daily with significant volatility.
Interestingly, unlike Strategy’s most senior preferred stock STRF, STRE has mid-stack capital seniority beneath bondholders, STRF, and STRC.
Although seniority is far less important than the dividend rate or stated value adjustments for Strategy preferred investors, it’s interesting that US dollar investors in STRF will have seniority over euro investors in STRE.
