Strategy Introduces 11.25% Yield Preferred Shares to Attract Bitcoin Investors

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. 

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MSTR Stock Drop 20%

The new preferred share push comes as Strategy’s common stock (MSTR) 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.

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