Strategy (Nasdaq: MSTR/STRK/STRF/STRD), formerly MicroStrategy, unveiled its Series A Perpetual Stretch Preferred Stock (STRC) pricing on July 24, 2025.
The company is offering 28,011,111 shares at $90 each, raising net proceeds of approximately $2.474 billion.
Proceeds are earmarked for general corporate purposes, notably acquiring more bitcoin and bolstering working capital.
Why It Matters: A Bitcoin‑Backed Yield Strategy
This move underscores Strategy’s aggressive and unconventional capital‑markets financing model anchored in bitcoin.
Analysts note STRC is effectively a Bitcoin‑backed Treasury‑bill alternative, offering high yield and reduced volatility .
It is Strategy’s fourth preferred stock issuance in 2025, following STRK, STRF, and STRD, with total preferred raises exceeding $3.5 billion.
With over 607,770 BTC under management (~3% of mined supply, valued at ~$71–72 billion), Strategy remains the largest corporate bitcoin holder globally.
STRC Terms and Mechanics
The STRC shares are priced at a $90 per share, below the $100 stated amount, creating an initial effective yield of 9.5%–10%.
Dividends are variable‑rate and cumulative, set initially at 9% per annum on the $100 stated amount, payable monthly starting August 31, 2025.
Strategy retains discretion to adjust rates monthly within constraints tied to SOFR movements, ensuring price stability near $100 par.
If unpaid, dividends compound monthly at the applicable rate until settled in full.
Redemption and Structural Protections
Strategy may redeem all or part of the STRC stock after listing on Nasdaq or NYSE at $101 per share plus any unpaid dividends, subject to a $250 million outstanding minimum unless fully redeemed.
The company can also trigger a clean‑up or tax redemption, requiring redemption of all remaining shares if outstanding below 25% of original issue or upon certain tax events.
Holders will also have fundamental‑change repurchase rights, allowing them to require Strategy to buy back shares at stated amount plus dividends in case of defined corporate events.
Strategic Context: Financing the Bitcoin Flywheel
Since pivoting to Bitcoin in 2020, Strategy has built a unique Bitcoin‑treasury machine fueled by convertible debt, preferred stock, and equity sales.
Between Q2 2025 alone, Strategy added roughly 21,000 BTC, increasing its holdings from 528,185 to 597,325, generating 104% annualized returns on MSTR stock versus Bitcoin’s 59% and the S&P 500’s 14%.
STRC is reportedly expanding from an initial $500 million issue to around $2 billion, driven by strong investor demand.
This perpetual issuance strategy helps reduce reliance on convertible debt (currently ~$8 billion), most of which remains out‑of‑the‑money, meaning it must be repaid or converted to equity.
By issuing permanent capital (preferred and common), Strategy aims to minimize liquidity risk and rid its capital stack of fragile conversion triggers.
Market Reception and Risks
Investors value STRC’s monthly yield structure and bitcoin backing, making it attractive relative to typical money‑market and fixed‑rate issues. However, STRC lacks a formal credit rating, and likely would be judged junk if rated; trust rests on Strategy’s bitcoin reserves eclipsing its debt and equity combined.
Some analysts describe preferred issuances as accretive to common‑shareholder value, assuming bond conversions fuel equity growth.
But skeptics caution Strategy cannot generate sufficient operating cash from its software business (modest revenue), making bitcoin’s price and market sentiment critical determinants of financial stability.
Institutional Insight: Research on Corporate Bitcoin Exposure
Recent academic studies shed light on corporate bitcoin integration.
A May 2025 paper analyzing 39 publicly listed bitcoin‑holding firms found an average BTC beta of 0.62, with Strategy among companies where beta exceeded 1, indicating strong correlation with bitcoin price movements.
Transfer entropy analysis revealed bitcoin often drives information flow into equity, implying Strategy’s equity returns remain tethered to bitcoin volatility.
Another January 2025 study shows increasing Bitcoin‑equity correlation post‑institutional adoption, reaching a peak correlation of 0.87 with major indices in 2024, challenging conventional diversification strategies.
Such findings raise questions about risk management, hedging needs, and systemic exposure for investors betting on corporate bitcoin treasuries.
Outlook and Forecasts
Market watchers anticipate continued STRC issuance, linked to Strategy’s bitcoin accumulation pace and investor appetite for yield.
Some analysts expect Bitcoin to reach $150,000 by October 2025, making MSTR an amplified means of gaining exposure during a bull cycle.
If bitcoin continues rallying, Strategy may unlock convertible bonds and reduce leverage pressure.
Conversely, if bitcoin stalls or sentiment shifts, preferred payouts could be strained, raising solvency concerns given minimal free cash flow.
STRC as Strategy’s Latest Financial Lever
STRC embodies Strategy’s financial engineering—leveraging investor confidence and bitcoin strength to fund further asset accumulation.
Its structure blends fixed‑income features with creative yield mechanics and redemption options.
For yield‑hungry investors comfortable with crypto risk, STRC offers structured exposure to bitcoin via a corporate credit instrument.
Yet the model depends on continuous market goodwill and bitcoin price performance. Should those falter, Strategy’s pyramid of convertible debt and preferred layers may test limits.
STRC therefore reflects both opportunity and fragility, offering fascinating insight into the evolving nexus between digital assets and corporate finance.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice.
