Strategy Introduces 11.25% Yield Preferred Shares to Attract Bitcoin Investors
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Strategy Inc., the largest corporate holder of Bitcoin, is preparing to issue more perpetual preferred shares to attract investors who want Bitcoin exposure without sharp stock price swings.
Meanwhile, the move comes as its stock swings sharply with Bitcoin, and the company looks for safer, yield-based funding options tied to its digital asset treasury strategy.
Strategy Introduces 11.25% Yield Preferred Shares
In a recent interview, Phong Le said that Strategy plans to issue new perpetual preferred shares to address investor concerns about sharp price swings in its common stock. The company’s shares often move more aggressively than Bitcoin itself, both up and down, because its business model is closely tied to the cryptocurrency.
To reduce this volatility risk, the company is introducing a new preferred share product called “Stretch.”
Unlike common shares that fluctuate heavily with Bitcoin’s price, this product is designed as a more stable, yield-focused option for investors. The preferred shares offer a monthly reset dividend rate of approximately 11.25% and are structured to trade at a $100 face value.
MSTR Stock Drop 20%
The new preferred share push comes as Strategy’s common stock
MSTRUSD
has fallen nearly 20% over the past month, recently trading near $125.By using more preferred shares instead of common stock, the company can raise funds with less dilution. Recently, Strategy raised about $370 million through common shares and only around $7 million through preferred shares for Bitcoin purchases.
This approach may help protect Bitcoin per share value and avoid selling common stock at discounted prices.
Strategy Holding Bitcoin With 12% Unrealized Loss
Despite all, Strategy holds 714,644 BTC on its books, valued at around $48 billion at recent prices. The firm’s average purchase cost is $76,052 per BTC.
With Bitcoin trading near $67,000, the holdings currently show an estimated unrealised loss near 12%, equal to roughly $5 billion on paper.
Perhaps, executives have said this drawdown does not change their long-term accumulation plan.
FAQs
What is Strategy’s new Stretch preferred share?
It’s a perpetual preferred share with an 11.25% monthly reset dividend and $100 face value, designed for stable Bitcoin-linked income with less volatility than common stock.How much Bitcoin does Strategy hold?
Strategy holds 714,644 BTC, purchased at an average of $76,052 per coin, currently valued near $48 billion with an unrealized loss of about 12%.What is the dividend on Strategy’s new preferred shares?
The Stretch preferred shares offer a monthly reset dividend rate of approximately 11.25%, paid to investors seeking yield over capital gains.Why is Strategy issuing more preferred shares now?
To reduce stock dilution, raise stable funding, and offer investors a less volatile way to gain Bitcoin exposure without the sharp swings of common shares.