Strategy Inc. Is having double impact on Bitcoin. The move is meant to calm investors while the company continues buying up the crypto asset it has made central to its identity. Reports say the pivot is focused on expanding a series of permanent preferred shares that trade near $100 and pay a reset dividend every month.
Preferred Shares to Control Volatility
Stretch, often referred to as STRC, is now at the center of that plan. According to the strategy’s own listing, STRC resets an annual dividend that currently reads 11.25% and is structured so its price trades close to its $100 par value.
Strategy CEO Phong Le told Bloomberg the company will rely more on preferred capital than common equity to raise funds for future Bitcoin purchases, reports said.
a consistent purchasing stance
The company’s executive chairman Michael Saylor is taking a clear stance on holding and buying. Based on the reports, Saylor confirmed that even if prices dropped dramatically, the company would not sell its Bitcoin holdings, and the strategy plans to make purchases each quarter on an ongoing basis. The comment is meant to reassure holders who have seen the stock fluctuate along with Bitcoin’s ups and downs.
Funding to buy Bitcoin without affecting stock price
The logic here is simple. Issue preferred stock that attracts income-seeking investors and use the proceeds to buy more Bitcoin rather than selling common shares or liquidating holdings.
Stretch is marketed as a way for investors to gain exposure while avoiding the same fluctuations that befall the strategy’s common shares. Some market watchers argue that this shifts the risk to preferred holders, and critics in finance commentary have been vocal about the approach of pursuing sustainability through yield products.
how much bitcoin and what does it mean
The report said the strategy disclosed the Bitcoin stack remains huge, numbering in the hundreds of thousands of coins, and executives point to a long time horizon for returns.
The company’s approach makes its balance sheet look more like a crypto fund than a traditional software company, and raises questions about how investors should value the stock compared to the underlying asset.
Investor Takeaways and Market Signals
Investors who want cash yield without direct crypto exposure may find preferred stocks attractive. At the same time, preferred shares carry risks of their own: dividends can be reset, and the company’s obligations to preferred holders compete with the need to manage leverage and reserves.
Featured image from Unsplash, chart from TradingView
editorial process Focused on delivering thoroughly researched, accurate and unbiased content for Bitcoinists. We adhere to strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and experienced editors. This process ensures the integrity, relevance and value of our content to our readers.
