Matt Dines, Chief Investment Officer at Build Markets, believes investors in perpetual preferred shares like STRC (Variable Rate Series A Perpetual Stretch Preferred Stock) from a Bitcoin treasury company are overlooking significant risks. Issuers of such securities are not obligated to return the principal and can pay dividends indefinitely without renegotiating terms, reports Cointelegraph.com. reports .
Dines notes that if investors want to recover their capital, they must sell the shares on the secondary market. Due to the lack of a maturity date, such assets face constant risks related to liquidity shortages and interest rate fluctuations.
Demand for STRC shares is rising: on Thursday, daily trading volume reached a record $1.5 billion. The company continues to use this instrument to fund Bitcoin purchases. According to Delphi Digital, the authorized issuance limit for STRC is $28 billion, and if this limit is not raised, the company's BTC accumulation pace may slow down.
Currently, the total par value of outstanding STRC shares is $8.5 billion, with a market value of nearly $8.4 billion. The share price is around $99, with an annual dividend rate of 11.5%. The dividend rate is variable and is reviewed monthly.
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