Strategy is shifting the way it finances its bitcoin accumulation, increasingly relying on preferred equity after a $1.18 billion raise highlighted a move away from common stock.
The company last week used its STRC perpetual preferred shares as the primary funding source for bitcoin purchases for the first time. On Monday, Strategy disclosed it had bought 22,337 BTC in the prior week — its fifth-largest acquisition to date.
Of the total funding, $1.18 billion came from STRC issuance, equivalent to roughly 16,800 BTC at an average price of $70,000. This dwarfed the $396 million raised through its at-the-market (ATM) common equity program, which has historically been its main tool for building its bitcoin position. The firm now holds 761,068 BTC.
The pivot comes with higher ongoing costs. At STRC’s 11.5% dividend rate, the latest issuance translates to about $135 million in annual payouts, pushing Strategy’s total dividend obligations above $1 billion per year.
To manage this burden, the company has set aside approximately $2.25 billion in cash reserves, offering a buffer as financing costs increase.
The shift also reflects pressure on its common stock, which has fallen more than 70%. Strategy appears keen to limit further dilution, suggesting that equity issuance may become more selective. Common stock sales are likely to be used primarily when its multiple to net asset value (mNAV) is well above 1 or when additional cash reserves are needed.
Overall, the company is moving toward a funding model centered on preferred capital, with STRC now playing a leading role in its bitcoin acquisition strategy.
There are also early indications of strain in the preferred shares themselves. STRC has traded below its $100 par value for three consecutive days following its March 15 ex-dividend date. With its one-month volume-weighted average price now under par, Strategy may consider raising the dividend by another 25 basis points to support the stock.
