According to Strategy Inc. (NASDAQ:MSTR) Chairman Michael Saylor, a $10 billion short against STRC (NASDAQ:STRC) preferred stock would benefit the company.
What Did Saylor Actually Say About the STRC Short?
Saylor laid out the logic in a video clip shared on X by account True North. He ran the math on a hypothetical $10 billion short against STRC at $100 par value.
A short seller would have to pay 12% annual dividends on that position, generating $1.2 billion in dividend payments that effectively double STRC’s AUM from $10 billion to $20 billion.
Strategy collects the credit while someone else funds the dividends.
“If someone wants to short $10 billion of this thing when it hits $100, then we will have $10 billion of credit and someone else will be paying 12% interest on their $10 billion,” Saylor said.
“We’re not going to worry about how someone might view it if they’re a short seller, one way or the other,” he added.
His broader point is that keeping STRC as a stable, low-volatility credit instrument maximizes liquidity, which increases demand, which ultimately benefits MSTR common stock and the company as a whole.
Why Does One Analyst Think Saylor Is Wrong?
DeFi analyst Viktor pushed back directly on X, arguing the $100 cap creates more problems than it solves.
Saylor’s scenario assumes STRC reaches $100 and stays there, letting Strategy issue new shares into short demand at par.
Viktor argued that short sellers would sell heavily between $99 and $100, preventing the stock from ever cleanly reaching par and forcing Strategy to defend that level by selling Bitcoin (CRYPTO: BTC) or MSTR at unfavorable prices.
The volatility argument is where Viktor draws the sharpest line. Capping STRC at $100 does not eliminate volatility, it just shifts it lower.
Instead of swinging between $95 and $105, the stock swings between $90 and $100, giving holders the same uncertainty at a worse price with a worse risk-reward profile.
“It is mathematically impossible to reduce the volatility of STRC down to 1%,” Viktor wrote. “The volatility swings will always be around 10%.”
Viktor added that he plans to publish a full article laying out the case in detail.
Trader Notes: As of publication, MSTR is down 2% on the day, trading near support around $90–$92, while $105 remains the key resistance level.
Photo via Shutterstock