Michael Saylor's Strategy Funding More Bitcoin Purchases With New Preferred Stock

Strategy (MSTR) Tuesday morning unveiled its latest twist at raising funds from capital markets to fund additional BTC$111,103.05 purchases, but there are indications the Wall Street spigot is slowing.

The company's Perpetual Strife Preferred Stock (STRF) offers a fixed 10% annual cash dividend, paid quarterly, according to an SEC filing If dividends are unpaid, they compound at an additional 1% per year (quarterly), up to a maximum of 18%. The first dividend payment is scheduled for June 30, 2025.

Strategy's initial preferred series (STRK) initially offered only an 8% interest rate. And Strategy's series of convertible debt offerings came with negligible or even 0% interest rates (different product than preferred, of course).

Unlike common stock, STRF holders do not have voting rights but have priority in liquidation with a $100 per share liquidation preference. Strategy has the right to redeem STRF if fewer than 25% of the original shares remain or if tax events occur, while holders can demand a buyback in case of a fundamental change.

STRF is expected to trade on Nasdaq within 30 days of issuance, offering investors bitcoin exposure with a high-yield structure. Morgan Stanley, Barclays, Citigroup, and Moelis & Company are joint book-running managers for the offering, conducted under an SEC shelf registration.

After buying bitcoin at a galloping pace over the past several months, Strategy's fundraising and token acquisitions have slowed to a crawl in recent weeks. The company last week did make additional bitcoin purchases, but they were hardly needle-moving — just 130 BTC for $10.7 million to bring total holdings to 499,226 tokens.

MSTR is lower by 5% in early action Tuesday alongside a slide in markets in general and bitcoin's dip to $81,300 from $84,000 a day ago.