MicroStrategy’s (NASDAQ: MSTR) Michael Saylor has introduced a fourth perpetual preferred security, “STRC”, offered to select investors. It follows STRK (8% cash coupon), STRF (10%), and the planned STRD (10% non-cumulative, 10% coupon) he announced last month.
The firm, now dba Strategy, plans an IPO of 5 million shares of STRC at a $100 stated amount to fund Bitcoin purchases and working capital. The issue pays cumulative cash dividends monthly in arrears, starting at a 9% annualized rate.
The company can redeem all or any whole number of shares at $101 plus accrued dividends once the stock lists, but cannot do a partial call unless at least $250 million remains outstanding. Holders get a put at $100 plus dividends after a fundamental change. Liquidation preference resets daily to the highest of $100, the prior day’s sale price, or the 10-day average.
Following the news, MicroStrategy fell 1.92% Tuesday to $416.30 and is down 7.83% over five days, while Bitcoin gained 0.70% on the day and 0.42% over the week to $118,249.08. The stock’s continued lag versus Bitcoin underscores fading enthusiasm for Saylor’s financing playbook.
Recent raises show the pattern. In seven days, MicroStrategy sold 728,479 shares of STRK and STRF for $74.6 million, then bought 705 BTC at an average $106,495. From May 19–25, it generated another $427 million by issuing 847,000 common shares plus 678,970 STRK and 104,423 STRF, purchasing 4,020 BTC at $106,237.
“Strategy has acquired 705 BTC for ~$75.1 million,” Saylor wrote, bringing holdings to 580,955 BTC at a cost of $40.68 billion, or roughly $70,023 each.
The pivot from common to preferred issues limits immediate common dilution but creates heavy fixed obligations. Authorizations still available—about $20.7 billion for STRK and $2.1 billion for STRF—imply roughly $1.9 billion in annual dividends if fully drawn, a deliverable the firm’s operating cash flow cannot cover.
With a blended preferred cost above 9%, Bitcoin must appreciate around 14% annually after tax just to service the coupons, before accounting for operating losses. STRK can convert to common if MicroStrategy price approaches US$1,000, reintroducing dilution risk. Meanwhile, STRF is permanently non-convertible but requires cash payments. STRD allows skipped dividends, yet investors gain a redemption put if a “fundamental change” occurs.
MicroStrategy has also indicated it may use preferred proceeds to repurchase common shares, aiming to support the market-price-to-NAV premium. That tactic becomes harder as the premium compresses, reducing the amount of Bitcoin each capital raise can buy and forcing successive issues to reach further “out the curve.”
At the Bitcoin 2025 conference, Saylor dismissed on-chain proof-of-reserves as “a bad idea,” and in December he claimed Bitcoin’s decade-long average gains let holders “double their capital every 18 months.”
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
