Strategy (MSTR) for the first time last week used its perpetual preferred stock as the primary means of accumulating bitcoin, marking a potential shift in how the company funds its bitcoin strategy.
The company announced on Monday that it bought 22,337 BTC in the previous week, its fifth largest acquisition ever.
Issuance through its STRC perpetual preferred stock was $1.18 billion, equivalent to about 16,800 BTC at an average price of $70,000, far exceeding the $396 million raised through its common shares on the market (ATM), which historically had been the primary tool used to build its bitcoin holdings, now totaling 06 BTC, 06 BTC.
At STRC’s current dividend rate of 11.5%, the $1.18 billion issuance implies approximately $135 million in annual dividend obligations. This has pushed the company’s total annual dividend burden to over DKK 1 billion.
That said, the company has set aside approximately $2.25 billion in USD reserves to fund these liabilities, providing a buffer amid rising capital costs.
With the company’s common stock down more than 70%, there appears to be incentive to support a higher share price without further dilution.
As a result, common equity can be used more selectively, primarily when mNAV (multiple to net asset value) is meaningfully above 1 or when the company is looking to build USD reserves. In practice, this suggests reduced reliance on share sales while leaning more on STRC, which avoids issuing new common shares.
Together, Strategy is increasingly funding bitcoin accumulation through its preferred capital base, with STRC now at the center of this approach.
Another dividend increase on the way?
STRC is showing early signs of price pressure. The preferred has now spent three consecutive days trading below its $100 par value following its March 15 ex-dividend date. With its one-month volume-weighted average price below par, the company may look to raise the dividend by another 25 basis points to support the price.
Read more: The math behind the strategy’s path to 1 million bitcoins by the end of 2026
