Strategy is pivoting toward preferred equity to bankroll its bitcoin accumulation, with a recent $1.18 billion raise underscoring a move away from its traditional reliance on common stock.
Last week marked the first instance of the company using its STRC perpetual preferred shares as the primary funding vehicle. On Monday, Strategy disclosed it had purchased 22,337 BTC over the prior week — its fifth-largest acquisition to date.
Most of that buying was funded through STRC issuance, which brought in $1.18 billion — roughly equivalent to 16,800 BTC at an average price of $70,000. This significantly outpaced the $396 million raised through its at-the-market (ATM) common equity program, previously the company’s main funding source. Strategy’s total bitcoin holdings have now reached 761,068 BTC.
The shift introduces higher fixed costs. With STRC carrying an 11.5% dividend, the latest issuance adds about $135 million in annual payouts, pushing the firm’s total dividend obligations above $1 billion.
To support these commitments, Strategy has set aside approximately $2.25 billion in cash reserves, providing a cushion as funding costs increase.
The move also reflects pressure on the company’s common stock, which has fallen more than 70%. In response, Strategy appears focused on limiting dilution, suggesting common equity issuance will be used more selectively — likely when its multiple to net asset value (mNAV) is well above 1 or when additional liquidity is needed.
Overall, the company is transitioning toward a funding model centered on preferred capital, with STRC playing a leading role in financing its bitcoin strategy.
There are also early signs of strain in the preferred shares themselves. STRC has traded below its $100 par value for three straight sessions following its March 15 ex-dividend date. With its one-month volume-weighted average price now under par, Strategy may opt to raise the dividend by another 25 basis points to help stabilize the security.
