Strategy’s At-The-Market STRK Preferred Stock Offering: What It Means for Investors

Key Takeaways

• STRK provides fixed 8.00% income with optional future conversion into MSTR common stock.
• At-the-market offering allows gradual capital raising based on market price and volume.
• STRK ranks above MSTR in liquidation, below bonds, offering structural investment protection.
• Proceeds support general operations and continued Bitcoin accumulation on Strategy’s balance sheet.

On March 10, 2025, Strategy, now under the name Strategy™, announced a new fundraising plan. The company plans to raise $21 billion by issuing a new security, the 8.00% Series A perpetual strike preferred stock (ticker: STRK). This offering will be conducted through an at-the-market (ATM) program, enabling shares to be sold gradually over time.

A perpetual strike preferred stock means that instead of selling all $21 billion worth of STRK shares in one large transaction, Strategy will sell smaller shares directly into the stock market over time based on market conditions. 

As a result, Strategy will raise funds gradually rather than all at once, providing the Bitcoin proxy company with greater control and flexibility over the process.

The proceeds will be used for general corporate purposes and working capital and, consistent with the company’s ongoing approach, for acquiring additional Bitcoin.

What Is STRK? Understanding Strategy’s New Preferred Stock

STRK is a type of preferred stock that differs from common shares by offering fixed dividend payments, higher priority in payouts during liquidation, and generally no voting rights. Specifically, STRK offers a fixed 8.00% dividend yield, subject to board approval, and typically pays the dividend quarterly if declared.

Even though STRK has been designed to pay an 8.00% dividend, those payments are not automatic or guaranteed. The company’s board of directors, which includes Michael Saylor, must formally approve or declare the dividend before it can actually be paid out to shareholders. 

While not stated in the release, dividend payments generally depend on factors such as available earnings, liquidity, and corporate priorities and always require formal approval by the board.

Where STRK Sits in the Capital Structure

STRK occupies a distinct position in Strategy’s capital structure. It ranks above common stock in terms of payout priority but below all forms of debt, such as bonds or notes. 

In a liquidation scenario, STRK holders would be paid after debt holders but before common shareholders.

Key Features of STRK 

• Equity status: Unlike bonds, STRK is still classified as equity, not debt.
• Capital structure priority: STRK ranks above common stock but below bonds in the payout hierarchy.
• Liquidation rights: In the event of liquidation, STRK holders are paid before common shareholders, but after bondholders.
• Perpetual nature: STRK has no maturity date and the company is not obligated to redeem the shares.
• Convertible feature: STRK can be converted into Strategy’s Class A common stock.
• Undisclosed conversion terms: The specific details of the conversion such as ratio or timing, have not been released.

Understanding At-the-Market (ATM) Offerings and Strategy’s STRK Share Sale

An at-the-market offering (ATM) is a method for a company to raise capital by selling new shares directly on the open market over time rather than in a single, large offering. This approach allows for greater flexibility in timing and pricing. Companies using ATM offerings can:

• Respond to favorable market conditions
• Sell shares incrementally based on trading volume
• Avoid large, sudden price drops from big capital raises

Strategy stated that it intends to sell STRK shares in a disciplined manner, taking into account the trading price and volume of STRK over time. This means investors should expect the issuance to be gradual and opportunistic, not all at once.

The offering is conducted under Rule 415(a)(4) of the Securities Act of 1933, which defines this type of real-time market sale. These shares may be sold via:

• Open market sales
• Negotiated private transactions
• Block trades with institutional investors

Why Is Strategy Raising Capital Using a Preferred Stock Offering?

The preferred stock offering is part of Strategy’s ongoing strategy to use capital markets to fund Bitcoin accumulation. Over the past several years, the company has issued:

• Convertible notes
• Common stock offerings
• Senior secured debt

All proceeds from those initiatives have consistently been used to acquire more Bitcoin, positioning Strategy as the largest corporate holder of BTC in the world.

The company creates an additional fundraising layer in its capital structure by using preferred stock rather than more common shares or extra debt. It allows them to raise cash without immediately diluting existing MSTR shareholders and increasing interest-bearing debt.

This structure provides income-style exposure for investors while still keeping the company aligned with its core Bitcoin strategy.

How STRK Impacts Various Investors

Here’s how STRK impacts existing and new investors:

Existing MSTR Shareholders

For those already holding Strategy’s common stock (MSTR), the introduction of STRK adds a new layer to the company’s capital strategy. Because this preferred stock raises capital without issuing new common shares upfront, STRK helps minimize immediate dilution of existing shareholders.

However, since STRK is convertible into common stock, the total number of outstanding MSTR shares could increase, depending on how many STRK holders choose to convert. That potential for dilution remains a longer-term consideration.

New Investors

Investors considering STRK will find a different kind of exposure than common stock. STRK offers a fixed 8.00% dividend yield, subject to board approval. While quarterly dividends are typical for preferred stock, Strategy has not confirmed the specific payout schedule.

This structure appeals to those seeking income rather than price-driven growth.

Regulatory Filing of the STRK Offering

The STRK offering is registered under an automatic shelf registration statement that became effective on January 27, 2025 (SEC File No. 333-284510). The prospectus supplement was filed with the U.S. Securities and Exchange Commission (SEC) on March 10, 2025, outlining the terms of the offering.

Sales of STRK must comply with applicable securities regulations, and the offering may not be available in certain jurisdictions.

Strategy’s Bitcoin Acquisition Strategy: A Corporate Vehicle for BTC Exposure

Strategy began its Bitcoin acquisition strategy in 2020 and, with the announcement of the Bitcoin Strategic Reserve in 2025, is on track to become a trillion-dollar market cap company. Since then, Strategy has positioned itself as a corporate vehicle for Bitcoin exposure. 

Instead of operating like a typical software company, its business model now revolves around active treasury management focused on Bitcoin accumulation. As of March 12, 2025, the company holds 499,096 Bitcoin.

By offering both income-oriented securities (like STRK) and growth-oriented equity (MSTR), the company gives investors a range of Bitcoin-linked investment exposures without having to buy BTC directly.

The company’s public statements continue to reinforce this commitment: proceeds from equity and debt financings are consistently used to accumulate BTC as a treasury reserve asset.

Here is a quick comparison between MSTR and STRK:

Key Risks Associated With Strategy’s STRK Preferred Stock

The STRK structure offers a blend of fixed-income characteristics with optional equity upside, appealing to investors seeking alternative exposure to Strategy’s Bitcoin strategy. However, like any investment instrument, STRK comes with its own set of trade-offs. Below is a quick overview of the key limitations to consider.

• Dividend not guaranteed: Payments depend on board approval and company financials.
• Bitcoin’s volatility: Bitcoin is a volatile asset; the value of STRK shares is influenced by both the company’s performance and the volatility of Bitcoin.
• No voting Rights: Investors have no influence over corporate decisions.
• Conversion terms unknown: Key details like timing and ratio have not been disclosed.
• Perpetual structure: No maturity date meaning the company isn’t obligated to redeem the shares.

Conclusion

Strategy’s STRK preferred stock offering represents an expansion of the company’s capital market strategy. 

It introduces a new type of investor exposure, one focused on dividend yield with optional equity conversion, while supporting the company’s ongoing Bitcoin acquisition model.

However, investors should be aware of the risks involved. The value of STRK shares is tied to both the company’s performance and the volatile nature of Bitcoin. As Strategy continues to increase its Bitcoin holdings, fluctuations in the price of BTC could impact the company’s financial stability and shareholder value. 

Furthermore, the offering’s structure may introduce liquidity risks, as the company is selling incremental shares over time. Investors should carefully consider these factors and ensure they are comfortable with the risks associated with investing in a Bitcoin-focused business model.

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