Michael Saylor’s Spinal Tap ad says STRC is like a bank account — it isn’t

Michael Saylor used AI to appropriate a famous scene from the mockumentary This Is Spinal Tap to advertise STRC as a competitor to insured savings products like bank accounts and money markets.

STRC is a share of Saylor’s company Strategy (formerly MicroStrategy) that pays non-guaranteed dividends at the sole discretion of the company’s board of directors.

Unlike US bank accounts or money markets that enjoy FDIC, NCUA, or SIPC guarantees against loss, STRC offers no such assurances.

In fact, it’s fluctuated in value over the past 52 weeks from $90.52 to $100.42 — deviating substantially below its $100 par. In the past two weeks, for example, STRC has traded below $94.

In Saylor’s new promotion, a Nigel Tufnel lookalike explains to viewers that earning 0% dividends is “like a normal checking account,” or viewers could “turn it up to 3%” in a money market.

If they want “awesome” dividends, they could turn the dial to 10%, or they could choose STRC at 11%.

Concluding with a call to action and a celebratory chorus, viewers are told they can “stretch your income.”

Saylor has repeated similar comparisons across various broadcast media, even though STRC isn’t any type of insured savings product. Indeed, the brazenness of this new Spinal Tap-themed ad isn’t an anomaly.

Read more: Strategy manager wrong about BTC backing STRC

Months of likening STRC to bank accounts and money markets

“Everybody in the world would love to have a high yield bank account that yielded 10% or more,” Saylor broadcasted on national TV in reference to STRC last September.

“Or they’d love to have a money market that gave them double or triple their normal money market.”

Saylor has repeatedly likened STRC to insured savings products like FDIC-insured bank accounts or SIPC-insured money markets.

His company called STRC “Treasury credit,” even though the common understanding of US Treasury credit is literally risk-free savings bonds — redefining both terms using his ever-expanding dictionary of invented terminology.

The company went on to bury disclaimers about STRC’s “price stability” descriptions on page 90 of its latest earnings presentation where it finely admitted that STRC isn’t a money market fund.

It also admitted that although it plans to continue paying dividends and hopes to encourage traders to keep STRC near its par value, it’s actually “not required to hold any assets to back the STRC Stock.”

Saylor has called STRC his company’s “greatest feat of financial engineering to date.” He once said that Strategy could sell $10 trillion worth of the shares and similar products denominated in foreign currencies.

“They want higher yield than a money market. We designed [STRC] for them,” Saylor said in October. “Who is [STRC] targeted at? There’s $18 trillion of bank accounts.”

Read more: The many weird AI depictions of Michael Saylor

More ‘high-yield savings account’ claims

On the public record, Saylor continued, “You can see the idea of this is a high-yield savings account that just pays twice your normal savings account if you understand and if you believe in bitcoin.”

These quotes are not cherry-picked examples. There are ample, similar examples.

“How many people want a money market that pays them 10% instead of 4%? A lot of people want that. So, we just kind of created something that looks like a money market instrument,” Saylor said at another conference.

In another egregious example, Saylor likened STRC to an FDIC-insured bank account after he calculated the tax-advantaged yield equivalents of STRC’s dividend by state of residence.

“We created a bank account that pays 17-20% by combining digital capital with a digital credit instrument with a digital treasury company that issues securities to pay the dividend,” he declared.

From a stage in Dubai, Saylor said, “When designing STRC, our goal was to create a high-yield bank account-style product.”

He has repeated that claim. “Our goal is to provide you with a bank account that pays you 10% instead of your bank that pays you 4 or 3 or 2 or 0. That’s what STRC is.”

Not a bank account or money market

To be clear, despite Saylor’s promotional statements, STRC is nothing like a bank account or money market.

Indeed, it has no insurance from FDIC, NCUA, SIPC, or otherwise to guarantee its par value.

Strategy isn’t required to hold full assets to back STRC’s par value, isn’t required to maintain any particular pricing or stable value, and isn’t subject to the liquidity requirements of real money market funds.

STRC can and has lost value of its investors’ principal during periods of volatility, trading over 9% below its par value in the past.

Investors don’t have a direct redemption right with Strategy at par value, so they must hope for secondary market traders to bid for shares near par value.