Leverage liquidations, not credit issues, drove STRC, SATA drop, says Strive CEO

Strive CEO Matt Cole stated on X that the recent intraday price drop in Strategy's (MSTR) preferred stock, STRC, and Strive's (ASST) preferred stock, SATA, was a temporary event driven by a cascade of leverage liquidations rather than a fundamental decline in the assets' credit quality. On June 18, STRC briefly plummeted to $82.5, while SATA fell into the low $90s. Cole explained that the volatility was the result of forced liquidations of investors who had taken on excessive leverage using the assets as collateral. He drew a parallel to past cases where hedge funds using highly leveraged positions with U.S. Treasuries went bankrupt, emphasizing that the underlying collateral's value was not impaired. He stressed that Strive's dividend reserves are being maintained and that there is no disruption to the company's ability to meet its dividend obligations or its long-term strategy. SATA is a preferred stock similar to STRC, issuing new shares to buy BTC when its price exceeds a face value of $100. Unlike STRC, which pays dividends twice a month, SATA reportedly provides dividends every business day.