This Tuesday morning, Strategy (MSTR) revealed its latest approach to raise funds through capital markets to support further bitcoin (BTC) purchases. However, signs indicate that Wall Street’s enthusiastic support may be beginning to wane.
The latest offering, known as the Perpetual Strife Preferred Stock (STRF), guarantees a fixed annual cash dividend of 10%, paid quarterly, as stated in an SEC filing. If any dividends go unpaid, they will compound at an additional rate of 1% per year (compounded quarterly), reaching a maximum of 18%. The initial dividend payout is scheduled for June 30, 2025.
In comparison, Strategy’s previous preferred stock series (STRK) offered a lower interest rate of 8%, while its series of convertible debt products came with minimal or no interest rates at all, marking a significant shift in their fund-raising strategy.
Unlike traditional common stockholders, holders of STRF will not possess voting rights; however, they will enjoy a priority claim during liquidation with a liquidation preference set at $100 per share. Notably, Strategy retains the option to redeem the STRF shares if less than 25% of the original shares are outstanding or if specific tax events occur. Additionally, holders can request a buyback in response to any fundamental changes.
Expected to trade on Nasdaq within 30 days of issuance, STRF offers investors a unique opportunity to gain exposure to bitcoin within a high-yield investment structure. The offering is being jointly managed by Morgan Stanley, Barclays, Citigroup, and Moelis & Company as part of an SEC shelf registration.
Despite aggressively acquiring bitcoin in recent months, Strategy’s fundraising and cryptocurrency acquisitions have seen a sharp decline in recent weeks. Although the company did acquire an additional 130 BTC for $10.7 million last week, this modest investment brings their total holdings to 499,226 tokens—a number that is unlikely to significantly disrupt their market impact.
In early trading on Tuesday, MSTR shares fell by 5%, reflecting broader market trends and a decrease in bitcoin prices, which dipped from $84,000 to $81,300.
