Strategy’s (MSTR) senior perpetual preferred stock, STRF, is increasingly distinguishing itself as the company’s strongest-performing credit instrument, with investors gravitating toward the senior tranche amid a shifting market backdrop. The security has climbed roughly 20% from its November low, outpacing the recovery seen in Strategy’s junior preferred offerings.
Trading near $110, STRF has advanced 36% since its March launch and rebounded sharply from the Nov. 21 low of $92—a session that also marked bitcoin’s local bottom around $80,000. The parallel moves underscore the tight correlation between the preferred stock and bitcoin’s price action.
As the highest-ranking preferred in Strategy’s capital stack, STRF carries a 10% fixed annual dividend, governance rights, and penalty-triggered coupon step-ups in the event of missed payments. Its premium price has compressed the effective yield to about 9.03%, but demand remains firm thanks to the security’s senior protections and long-duration credit profile.
In late October, Executive Chairman Michael Saylor highlighted the widening gap between STRF and the more subordinated STRD, with investors requiring a 12.5% additional yield to hold the junior instrument. At the Nov. 21 stress point, that spread surged to a record 1.5 as capital rushed into senior exposure, driving STRD down to $65. The differential has since eased back to roughly 1.3.
Signs of divergence are also visible further down the preferred structure. The mid-tier STRC has undergone four dividend rate hikes to maintain investor participation.
The company’s equity has joined the broader rebound, rising from $155 on Dec. 1 to around $185. The rally reflects improving sentiment toward Strategy’s balance sheet and the bitcoin market following the company’s move to establish a $1.44 billion cash reserve earmarked for preferred dividend payments.
