Strategy Expands Bitcoin War Chest with $711M STRF Preferred Stock Offering
25/3/2025
Strategy (MSTR), the U.S. company known for its aggressive bitcoin (BTC) acquisition strategy, is set to raise approximately $711 million through its latest financial instrument—Series A perpetual preferred stock, STRF. This follows the success of its earlier preferred stock issuance, STRK.
The company is issuing 8.5 million STRF shares at $85 each, exceeding its initial $500 million target. The sale, scheduled to close later on Tuesday, will provide additional capital for bitcoin purchases. This follows Strategy’s previous preferred stock offering, STRK, which initially raised $563 million.
Understanding STRF: A High-Yield Perpetual Preferred Stock
STRF is a perpetual preferred stock, meaning it sits between traditional debt and common equity, offering predictable dividend income with lower volatility than common shares. Unlike common shareholders, STRF holders do not receive voting rights.
STRF carries an annual dividend of 10% on its $100 stated value, with quarterly payments made in cash. If Strategy misses a dividend payment, the rate increases by 1% annually, compounding up to a maximum 18% rate—providing a strong incentive for timely payments.
The company retains the right to redeem all STRF shares under specific conditions, such as tax events or if less than 25% of the original issuance remains outstanding. In these cases, investors would receive the liquidation preference plus any accrued dividends. Additionally, in the event of a fundamental corporate shift, shareholders can force Strategy to repurchase their shares at the stated value plus any unpaid dividends.
STRF vs. STRK: Higher Yield vs. Potential Upside
STRF differs from Strategy’s previous offering, STRK, which features an 8% annual dividend based on its $100 liquidation preference. However, STRK offers a conversion option, allowing holders to swap preferred shares for common stock at a 10:1 ratio if Strategy’s stock price hits $1,000—creating potential for equity appreciation.
STRF, on the other hand, functions more like a fixed-income instrument, making it more stable than STRK but without the potential upside tied to stock performance. Investors seeking predictable income may prefer STRF, while those looking for a mix of yield and equity upside might find STRK more attractive.
Strategy’s Funding and Bitcoin Accumulation
To ensure dividend payments, Strategy plans to use a combination of operational cash flow, proceeds from convertible debt issuances, and at-the-market (ATM) common stock sales. The company also has an open ATM program for STRK and recently purchased 130 BTC.
With about $3.57 billion remaining in its ATM capacity, Strategy has significant financial flexibility to maintain dividend payouts while continuing its bitcoin accumulation. As of Monday, Strategy’s BTC holdings stood at 506,137, and its stock surged more than 10% in response to the latest financing developments.
