Strategy Perpetual Preferreds Yield Up To 12% On Bitcoin-Bank Funding Model

Strategy Inc., formerly MicroStrategy, is marketing four perpetual preferred share classes that pitch fixed-income investors on Bitcoin-linked yield without direct crypto exposure. The instruments are trading under the tickers STRF, STRC, STRK and STRD.

Per the company's filings, the stack ranges from an 8% fixed-coupon convertible to a high-yield issue paying roughly 11% to 12%. All four classes rank senior to MSTR common stock in a liquidation but are not collateralized by the company's Bitcoin reserves.

STRF, the Strife series, carries a 10% fixed quarterly coupon and the top liquidation priority among the four. The terms include penalty rates of up to 18% if a dividend payment is missed.

STRC, the Stretch series, pays a floating rate in a band of about 9.5% to 11.5%. The share is engineered to hold a stable $100 reference price, with cumulative monthly dividends and a proposed shift to semi-monthly payments.

STRK, the Strike series, pays an 8% fixed quarterly dividend and is convertible into MSTR common shares. The conversion feature is intended to give holders participation in Bitcoin price upside through the common-equity proxy.

STRD, the Stride series, sits last in line among the four preferreds but carries the highest stated yield, in the 11% to 12% range. Dividends on the Stride class are non-cumulative.

The dividends are funded from a corporate treasury reserve. The filing said the company is holding about $2.25 billion in cash against annual preferred obligations of roughly $887 million. That reserve covers about 19 months of payments at current run-rate.

Per Strategy, capital for the program comes from at-the-market preferred share and debt issuance, with proceeds rotated into Bitcoin and working capital. Founder Michael Saylor said in prior remarks that the company would sell Bitcoin to meet dividend obligations if required.

The structure has drawn comparisons to closed-end funds and income vehicles that generate above-market distributions through capital actions rather than operating cash flow. Critics, including Seeking Alpha analyst Rida Morwa, have described the approach as "selling the furniture to pay the rent."

What it means: The four preferred classes give yield-seeking accounts a packaged way to underwrite Strategy's Bitcoin treasury strategy at coupons of 8% to 12%, but the payout stream depends on continued access to capital markets and on Bitcoin holding a premium against MSTR's float. If issuance windows close or that premium compresses, the published yields rely more heavily on asset sales than on recurring income.