Strategy Prioritizes Preferred Stock Issuance Over Common as BTC Accumulation Continues
Strategy (MSTR) is recalibrating its funding strategy by leaning on preferred equity to expand its bitcoin position, minimizing dilution risks for existing common shareholders.
In recent weeks, the firm has opted not to use its at-the-market (ATM) program for common stock—historically a primary vehicle for raising capital for BTC purchases. Instead, it tapped its STRK and STRF perpetual preferred stock ATMs to fund a 1,045 BTC buy.
This shift reflects tightened premiums between MSTR’s trading price and its modified net asset value (mNAV). Without a substantial market premium, issuing common shares offers little upside while diluting long-term holders.
According to company data, the funding split for the latest BTC acquisition was 59.18% STRK and 40.82% STRF. Both preferreds have delivered strong lifetime returns—STRK at 35%, STRF at 24%—making them an effective, lower-impact capital source.
Analysts note a supportive rate environment: despite U.S. 10-year Treasuries holding steady near 4.5%, yields on STRK and STRF have compressed, behaving more like bonds. As demand for the preferred shares increases, dividend yields decrease, boosting their utility as fundraising tools.
Strategy may return to common stock issuance if its share price meaningfully exceeds 2x mNAV, enabling premium-priced capital raises. For now, preferred equity issuance gives the firm capital efficiency while preserving the value proposition for core equity holders.
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