Strategy (MSTR) for the first time last week used its perpetual preferred stock as the primary vehicle for accumulating Bitcoin, marking a potential shift in how the company funds its Bitcoin strategy.
The company announced on Monday that it had purchased 22,337 BTC over the previous week, its fifth largest acquisition on record.
The issuance through its STRC perpetual preferred stock was $1.18 billion, the equivalent of approximately 16,800 BTC at an average price of $70,000, far exceeding the $396 million raised through its at-the-market (ATM) common stock program, which had historically been the primary tool used to build its bitcoin holdings, now totaling 761,068 BTC.
At STRC’s current dividend rate of 11.5%, the $1.18 billion issue implies approximately $135 million in annual dividend obligations. This brought the company’s total annual dividend burden to more than $1 billion.
That said, the company has set aside approximately $2.25 billion in U.S. dollar reserves to fund these obligations, providing a buffer against rising capital costs.
With the company’s common stock falling more than 70%, it appears incentivized to support a higher share price without further dilution.
As a result, common stock may be used more selectively, primarily when the mNAV (multiple of net asset value) is significantly greater than 1 or when the company is seeking to build U.S. dollar reserves. In practice, this suggests less reliance on common stock sales, while relying more on STRC, which avoids issuing new common stock.
Overall, Strategy is increasingly funding bitcoin accumulation through its preferred capital base, with STRC now at the center of this approach.
A new dividend increase coming?
STRC is showing early signs of pricing pressure. The preferred stock has now spent three consecutive days trading below its par value of $100 following its March 15 ex-dividend date. With its one-month volume-weighted average price below par, the company could consider increasing 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
