Bitcoin Buying Spree May Continue With New Preferred Stock Plan: Strategy CEO

Strategy Inc. is doubling down on Bitcoin. The move is meant to calm investors while the company keeps buying the crypto asset it made core to its identity. Reports say the pivot centers on expanding a line of perpetual preferred shares that trade near $100 and pay a reset dividend each month.

Preferred Shares To Anchor Volatility

Stretch, often shown as STRC, now sits at the center of that plan. According to Strategy’s own listings, STRC carries an annualized dividend reset that currently reads 11.25% and is structured so its price tends to trade near a $100 par value.

Reports say Strategy CEO Phong Le told Bloomberg the company will lean more on preferred capital than on common equity to raise money for future Bitcoin buys.

A Relentless Buying Stance

Michael Saylor, the company’s executive chair, has been blunt about holding and buying. Based on reports, Saylor affirmed the company will not sell its Bitcoin holdings even if prices fell dramatically, and that Strategy plans to purchase each quarter on an ongoing basis. The comment is meant to reassure holders who have seen the stock move with Bitcoin’s swings.

The logic here is simple. Issue preferred stock that appeals to income-seeking investors and use the proceeds to buy more Bitcoin, rather than selling common shares or liquidating holdings.

Stretch is marketed as a way for investors to get exposure while avoiding the same wild swings that hit Strategy’s common shares. Some market watchers argue this shifts risk to preferred holders, and critics in finance commentary have been vocal about the optics of pushing stability through yield products.

Reports note Strategy’s disclosed Bitcoin stack remains vast, numbering in the hundreds of thousands of coins, and executives point to a long time horizon for returns.

The company’s approach makes its balance sheet look more like a crypto fund than a traditional software concern, and that raises questions about how investors should value the stock versus the underlying asset.

Investors who want cash yield without direct crypto exposure may find preferred stocks appealing. At the same time, preferred shares carry their own risks: dividends can be reset, and the company’s obligations to preferred holders compete with the need to manage leverage and reserves.

Featured image from Unsplash, chart from TradingView