Headline: Strategy leans on preferred stock to keep buying Bitcoin while dampening share volatility Strategy is ramping up sales of perpetual preferred shares as a way to fund ongoing Bitcoin purchases while reducing the wild swings that have tracked its ordinary shares. In a Feb. 12 interview with Bloomberg, CEO Phong Le said the company is marketing more of a perpetual preferred product called “Stretch,” aimed at investors who want exposure to digital assets but not the extreme price moves of common stock. Stretch pays a variable dividend that is reset monthly; the current dividend rate is 11.25%. The security is structured to trade close to its $100 par value, helping limit the sharp price moves that often hit Strategy’s common shares. Why preferred shares? - Preferreds sit above common stock in the capital structure (but below debt), generally offer steady income and priority on dividends in exchange for limited or no voting rights. - That predictable-return profile makes them attractive to institutions—pension funds, insurers and banks—that prefer stability over high beta exposure to Bitcoin. - Analysts say preferred issuances also bolster the balance sheet: compared with convertible bonds they reduce refinancing risk and avoid sudden dilution for common shareholders. Funding and Bitcoin accumulation Over the past three weeks, Strategy raised about $370 million via common stock sales and roughly $7 million via preferred shares. All proceeds were used to buy more Bitcoin, bringing the company’s holdings to north of 714,000 BTC—roughly $48 billion at current prices. The financing shift reflects longer-term dynamics in Strategy’s business model: the company has built itself on using capital markets to accumulate BTC, and its common stock frequently behaves like a leveraged play on the cryptocurrency—surging when Bitcoin rallies and amplifying losses when it falls. With Bitcoin about 50% below its recent peak, that sensitivity has made relying solely on common stock raises more difficult. Broader context and outlook Co-founder Michael Saylor has reiterated that the company does not plan to sell its Bitcoin and intends to keep buying each quarter regardless of market conditions. Strategy first leaned into preferred-stock funding earlier and raised roughly $5.5 billion through several preferred offerings in 2025; the latest moves continue that pattern and signal the company’s confidence in this long-term funding model. Bottom line: Preferred stock gives Strategy a tool to keep piling into Bitcoin while muting the feedback loop between the crypto’s volatility and the company’s share price—making its capital-raising more palatable to conservative institutional buyers and strengthening its financing position. Read more AI-generated news on: undefined/news

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