STRATEGY IS COPYING A MECHANIC STRIVE SHIPPED IN MAY — SATA PAYS DAILY AND CLOSED AT $100.01, STRC PAYS TWICE A MONTH AND CLOSED AT $98.31 — STRC IS THE ONE PAYING THE HIGHER RATE

Strategy asked its common stockholders on 25 September to let four preferred series accrue a dividend on every calendar day. Phong Le called it the era of always-on capital markets. Strive shipped the same mechanic on 14 May, when SATA became the first security listed in the United States to pay a daily cash dividend. Strategy is four months behind it, and that is the useful part, because it means there is already a live comparison.

Here is that comparison, from one trading day. On 24 September SATA closed at $100.01. STRC closed at $98.31. Both are hundred-dollar instruments. SATA pays daily, STRC pays twice a month, and STRC carries the higher rate of the two. It pays more and it trades lower. SATA has only existed since May and has not been tested through a long drawdown, which is worth holding in mind.

What a daily record date fixes is the sawtooth. When a dividend accrues to one date, the price climbs into that date and falls after it, and a security meant to sit at a hundred spends most of the month away from a hundred. Accrue every day and the step disappears. Strategy says the quiet part in its own risk language, warning in the presentation about the target trading value of STRC. A company with a target trading value is managing to par.

Read what that makes STRC. Not a bet on the price of bitcoin going up, which is what the common stock is for. A hundred-dollar unit paying a rate the board resets, engineered to stay at a hundred. STRC goes daily on 2 November and the three fixed-rate series wait until January, which tells you whose par problem this is. At the time of this writing, bitcoin was $83,241.