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MIAMI, FLORIDA - JUNE 04: MicroStrategy CEO Michael Saylor speaks at the Bitcoin 2021 Convention, ... [+] a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida. The crypto conference is expected to draw 50,000 people and runs from Friday, June 4 through June 6th. (Photo by Joe Raedle/Getty Images)
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Strategy, the rebranded MicroStrategy and the world’s largest corporate Bitcoin holder, made headlines earlier today as it unveiled its latest preferred stock offering, STRF. The company launched a public offering of 5,000,000 shares of its Series A Perpetual Strife Preferred Stock (ticker: STRF), subject to market conditions. The new offering aims to raise capital for general corporate purposes, with a significant portion earmarked for Bitcoin acquisitions and working capital. The new STRF offering introduces a hybrid security designed to appeal to investors seeking lower volatility compared to Strategy’s volatile common stock (MSTR).
The STRF shares will be sold at market price. Strategy offers a liquidation price of $100/share. The liquidation price offered by the company is the amount per share that preferred shareholders are entitled to receive in the event of the company’s liquidation or dissolution, after satisfying debts but before distributing anything to common shareholders. It represents the preferred stock’s claim on assets.
The STRF stock’s dividends compound at an initial rate of 10% annually plus 1% for unpaid amounts, escalating by 1% per period up to a maximum of 18% per annum until settled. The dividend is payable quarterly in arrears starting June 30, 2025, if declared by Strategy’s board of directors. Assuming the full offering is executed as planned, the company would take on a potential $50,000,000 annual dividend obligation.
This is Strategy’s second preferred offering that offers a dividend. Earlier this year the company issued 7.3 Million of Series A Perpetual Strike Preferred Stock, STRK, offering a fixed annual dividend of 8%. This issuance netted the company $563.4 million in proceeds and represents a potential total annual dividend obligation of approximately $58,400,000.
Strategy’s potential cumulative annual dividend obligation from the STRK and STRF offerings, if both are fully executed as outlined, is approximately $108.4 million ($58.4 million for STRK and $50 million for STRF). This figure assumes full issuance and declared dividends. Actual payments depend on board decisions and financial health, making the obligation conditional rather than fixed. The actual dividend amount to be paid may also be higher if dividends go unpaid and triggers rates to escalate from the initial 10%.
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