Michael Saylor has a new pitch for Wall Street, and it involves selling a tiny sliver of Bitcoin to make everyone richer in Bitcoin. The Strategy Inc. executive chairman appeared on television to lay out a financial model he believes can fund perpetual dividend payments to preferred stockholders while simultaneously increasing the company’s Bitcoin treasury over time.

The core argument: by issuing credit instruments equivalent to just 1.4% of the company’s capital assets, Strategy can cover its dividend obligations and still come out ahead on Bitcoin accumulation.

The STRC model, explained

At the center of Saylor’s pitch is STRC, short for “Stretch.” It’s a variable-rate perpetual preferred stock that pays an 11.5% annualized dividend on a monthly basis.

The company sells a small amount of Bitcoin, or issues new preferred shares, to cover the STRC distributions. The key claim is that 1.4% of assets is all it takes to keep the machine running indefinitely. If Bitcoin appreciates even modestly, say around 2.3% annually in a conservative scenario, the math gets even more favorable.

The model anticipates that for every Bitcoin sold to fund dividends, the company can purchase 10 to 20 Bitcoins through ongoing capital raises and market activity.

Between May 26 and May 31, Strategy executed its first Bitcoin sale since 2022. The company liquidated 32 Bitcoins for approximately $2.5 million to finance STRC distributions. Saylor described the sale as opportunistic rather than a retreat from conviction.

How the math is supposed to work

Strategy claims that even if Bitcoin’s price stays completely flat, its existing holdings can support dividend obligations for decades. That relies on the continued ability to issue new preferred stock at attractive terms.

Saylor stated his goal is to position STRC as “the best credit instrument in the world.” The conservative scenario, the one where Bitcoin only appreciates around 2.3% per year, is designed to show that the model doesn’t require a moonshot to work.

What this means for investors

For income-seeking investors, an 11.5% annualized yield backed by a Bitcoin treasury is a genuinely novel product. It occupies a middle ground between a high-yield bond and a leveraged Bitcoin bet: you get regular income while maintaining exposure to Bitcoin’s upside potential. The risk: if Bitcoin drops significantly and stays down, covering those dividend payments becomes more painful.

Strategy sold 32 Bitcoins to fund distributions. That number will either stay small and manageable, validating Saylor’s model, or it will grow over time as dividend obligations compound. The ratio of Bitcoin sold to Bitcoin acquired will be the real scorecard.

Strategy was already the largest corporate holder of Bitcoin, and this new capital structure gives it a mechanism to keep accumulating without relying solely on equity dilution or convertible debt.

The biggest risk remains the one Saylor barely mentions: what happens in a sustained downturn. A 2.3% annual appreciation assumption is conservative, but zero appreciation or negative returns over multiple years is not outside the realm of possibility. In that scenario, the company would need to sell increasingly more Bitcoin, or issue preferred stock at less favorable terms, to keep the dividend machine running.