Which One to Choose? Analyzing Strategy’s Preferred Stock Offerings: STRF vs. STRK

Strategy’s Latest $711M STRF Offering Expands Bitcoin Reserves

25/3/2025

Strategy (MSTR), the U.S. firm renowned for its bitcoin (BTC) accumulation strategy, has introduced a new capital instrument—Series A perpetual preferred stock, STRF—raising approximately $711 million. The offering marks an expansion of the company’s financial toolkit following the success of its previous preferred issuance, STRK.

The company is issuing 8.5 million shares of STRF at $85 each, exceeding its initial $500 million target. The sale, set to conclude later on Tuesday, will provide fresh capital for additional bitcoin acquisitions. Strategy’s first preferred stock issuance, STRK, initially raised $563 million.

STRF: A Stable, High-Yield Preferred Stock

As a perpetual preferred stock, STRF operates between debt and equity, offering stable dividends while avoiding the price swings of common stock. Holders receive a 10% annual dividend on its $100 stated value, paid quarterly in cash. If Strategy fails to meet dividend obligations, the rate increases by 1% per year, compounding up to a maximum of 18%, ensuring an incentive for consistent payouts.

The company retains the right to redeem STRF shares under specific conditions, such as tax changes or if less than 25% of the original issuance remains. In such cases, shareholders will receive the liquidation preference along with any accrued dividends. Investors also have the option to force a buyback in the event of a fundamental corporate shift.

STRF vs. STRK: Higher Fixed Yield or Potential Conversion Gains?

Unlike STRF, Strategy’s earlier STRK preferred stock offers an 8% annual dividend and a conversion feature allowing holders to exchange preferred shares for common stock at a 10:1 ratio if Strategy’s stock price hits $1,000. This feature provides potential upside for investors betting on the company’s long-term growth.

While STRK appeals to those seeking both income and equity appreciation, STRF is positioned as a lower-risk option for investors prioritizing stable returns.

Bitcoin Strategy & Funding

Strategy plans to finance dividend payments through operational cash flow, convertible debt issuances, and at-the-market (ATM) sales of common stock. The company also maintains an ATM program for STRK and recently acquired 130 BTC.

With $3.57 billion in remaining ATM capacity, Strategy retains strong financial flexibility to support dividends while continuing its aggressive bitcoin acquisition. As of Monday, the company’s BTC holdings reached 506,137, and its stock surged over 10% following news of the latest funding round.