Strategy preferred stock Bitcoin funding

FIRM MOVES TO ISSUE MORE PREFERRED SHARES AMID BITCOIN PRICE SWINGS

ByMolly McNearney

Strategy preferred stock Bitcoin funding: Strategy is increasingly relying on preferred stock offerings as it seeks to continue buying Bitcoin while reducing the impact of market volatility on its share price.

The company’s stock has historically moved closely with Bitcoin’s price swings. As cryptocurrency markets fluctuate, Strategy’s shares often experience amplified moves in both directions. To manage this dynamic, the company is turning to alternative funding tools.

A New Risk-Management Approach

In a Feb. 12 interview with Bloomberg, CEO Phong Le explained that Strategy is issuing additional perpetual preferred shares to attract investors who want digital asset exposure without extreme price volatility.

The new product, called “Stretch,” offers a variable dividend that adjusts monthly. The current dividend rate stands at 11.25%. The structure is designed to keep the preferred shares trading close to their $100 par value, helping limit sharp price swings.

Preferred shares rank above common stock but below debt in the capital structure. They typically provide:

  • Priority on dividend payments
  • More stable income
  • No voting rights

This structure appeals to investors who prioritize steady returns over high-growth potential.

Funding Continued Bitcoin Accumulation

Over the past three weeks, Strategy raised approximately;

  • $370 million through common stock sales
  • $7 million via preferred shares

The proceeds were used to purchase additional Bitcoin, increasing the company’s holdings to more than 714,000 BTC, valued at roughly $48 billion.

For years, Strategy’s core strategy has centered on using capital markets to accumulate Bitcoin. As a result, its stock often behaves like a leveraged proxy for the cryptocurrency. Gains in Bitcoin typically boost Strategy’s shares, while declines tend to magnify losses.

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With Bitcoin currently trading about 50% below its recent peak, the company’s share price has faced significant pressure. This environment makes exclusive reliance on common stock sales more challenging.

Attracting Institutional Investors

Preferred stock provides an alternative funding channel designed to appeal to institutional investors such as pension funds, insurance companies, and banks. These investors generally prefer predictable income streams over high-volatility exposure.

The steady dividend structure and price stabilization features aim to make the offering more attractive to conservative capital pools.

Co-founder Michael Saylor has consistently stated that the company does not intend to sell its Bitcoin holdings. Strategy plans to continue adding to its position each quarter, regardless of short-term market conditions.

Strengthening the Balance Sheet

Analysts note that preferred shares may also improve Strategy’s financial flexibility. Compared with convertible bonds, preferred equity can:

  • Reduce refinancing risk
  • Limit sudden share dilution
  • Provide longer-term capital stability

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In 2025 alone, Strategy raised approximately $5.5 billion through multiple preferred stock offerings. The latest issuance reinforces management’s commitment to this funding model as part of its long-term Bitcoin strategy.

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