Strategy Inc. to Fund Further Bitcoin Buys via Preferred Stock (STRC)
Strategy Inc. plans to expand issuance of its perpetual preferred shares (ticker STRC) to raise capital for continued Bitcoin purchases. STRC trades near a $100 par value and carries a reset monthly dividend that annualizes to about 11.25% per company listings. CEO Phong Le told Bloomberg the company will rely more on preferred capital rather than common equity to fund future Bitcoin buys. Executive chair Michael Saylor reaffirmed that Strategy will continue buying and holding Bitcoin each quarter and will not sell existing holdings even if prices fall. Strategy’s disclosed Bitcoin reserve numbers remain large — in the hundreds of thousands of coins — shifting the company’s balance sheet closer to a crypto fund profile. The preferred-stock approach is pitched to income-seeking investors as lower-volatility exposure compared with common shares, but critics warn the move shifts downside and reset-risk to preferred holders and complicates valuation, leverage and reserve management. Key takeaways for traders: potential steady demand pressure from corporate buys; preferred issuance could raise capital without diluting common equity; and preferred holders assume dividend-reset and company-balance-sheet risks.
Bullish
Issuing preferred shares to fund further Bitcoin purchases is likely bullish for BTC price in both near and medium term for several reasons. First, it signals committed, recurring corporate demand: Strategy’s stated plan to buy each quarter creates predictable buy-side pressure. Second, raising capital via preferred shares avoids selling common equity or liquidating BTC reserves, preserving existing corporate holdings and adding incremental demand. Third, the scale of Strategy’s disclosed holdings (hundreds of thousands of coins) means additional buys by a large holder can have outsized market impact relative to retail flows. However, risks temper the bullish case: preferred shares carry reset-dividend and creditor-priority dynamics that could force different capital decisions under stress, and critics note this transfers downside to preferred holders which may limit investor appetite for large-scale issuances. Historical parallels include MicroStrategy’s prolonged BTC accumulation, which supported price during accumulation phases by signaling durable institutional demand. Short term, traders may see price support and reduced sell-side liquidity around major buy announcements; volatility may spike on issuance details or dividend resets. Long term, if other corporates copy the model, structural demand could raise BTC’s floor. Monitor issuance size, timing of purchases, and any changes to dividend reset terms — these will affect magnitude and duration of the bullish influence.