2 weeks ago
Strategy (MSTR), the bitcoin-focused firm entity formerly known arsenic MicroStrategy, launched its Perpetual Stretch Preferred Stock (STRC) precocious past period — an offering Executive Chairman Michael Saylor has described arsenic the company’s “iPhone moment.”
The STRC preferred banal has already raised $2.5 billion, and a recently opened $4.2 cardinal at-the-market (ATM) programme could widen its standard adjacent further — offering high-yield dividends backed by bitcoin and designed to entreaty to yield-seeking investors.
What is STRC, and however does it work?
STRC (marketed arsenic “Stretch”) is simply a variable-rate, perpetual preferred banal designed to present unchangeable pricing, beardown yield, and casual entree for income-focused investors seeking indirect bitcoin exposure. The shares wage a monthly dividend—initially acceptable astatine 9% annualized—based connected a $100 par value. Strategy whitethorn set that dividend monthly, wrong rules meant to support STRC trading adjacent to its $100 people price.
Each stock of STRC is overcollateralized with bitcoin astatine a ratio of astir 5-to-1, meaning that for each dollar of STRC issued, Strategy holds astir 5 dollars’ worthy of BTC. The information sits elder to different preferred stocks similar STRD, STRK, and the firm’s communal equity, but remains inferior to indebtedness and the STRF preferred series.
Dividends are cumulative and compound if unpaid. Importantly, if immoderate month’s outgo is missed, a dividend “stopper” activates — preventing payouts to inferior securities until STRC is made whole. The banal tin beryllium redeemed astatine the issuer’s enactment erstwhile listed connected Nasdaq (which it present is), and it includes a cardinal alteration enactment close astatine liquidation worth positive immoderate accrued dividends.
The information is engineered to relation similar a high-yield savings instrumentality with bitcoin backing — without the volatility of nonstop crypto holdings oregon the duration hazard of accepted preferreds.
Strategy raises $2.5 cardinal successful STRC IPO
The company’s IPO of STRC raised astir $2.5 cardinal done the issuance of 28 cardinal shares priced astatine $90 each. The offering was announced connected July 21 and closed connected July 29. Proceeds volition beryllium utilized for wide firm purposes, including further bitcoin purchases and moving capital.
The committee of directors declared an archetypal monthly dividend of $0.80 per share, with outgo scheduled for Aug. 31, 2025, to shareholders of grounds arsenic of August 15.
Saylor described STRC arsenic a clean, scalable instrumentality that solves the constraints of erstwhile superior tools similar convertible bonds and analyzable long-duration preferred shares. The merchandise was designed to entreaty not lone to organization allocators but besides to yield-seeking retail investors.
Inside the $4.2 cardinal ATM program
On July 31, Strategy announced a caller income statement allowing the institution to contented up to $4.2 cardinal worthy of STRC shares done an at-the-market (ATM) offering. This gives Strategy the quality to pat liquidity gradually, adjusting issuance based connected marketplace conditions and pricing.
Internal guidance suggests that Strategy intends to support issuance wrong a constrictive set — avoiding income beneath $99 oregon supra $101 (before fees), accordant with its people of maintaining a unchangeable $100 trading price. The steadfast explicitly stated it does not program to use this subject to its different preferred equity programs, reinforcing STRC’s unsocial positioning.
The ATM programme allows Strategy to conscionable superior needs flexibly, enactment its dividend policy, and standard BTC acquisitions further portion preserving shareholder alignment.
Why Saylor calls STRC his ‘iPhone moment’
Michael Saylor sees STRC not conscionable arsenic different capital-raising instrumentality — but arsenic a turning constituent successful firm finance. During Strategy’s Q2 2025 net call connected July 31, helium called the merchandise his firm’s “iPhone moment,” comparing its imaginable to the benignant of user breakthrough that redefined an full industry.
At the bosom of Saylor’s imaginativeness is STRC’s accessibility. Unlike Strategy’s earlier instruments — specified arsenic STRK, STRF, and STRD — which helium praised arsenic innovative but excessively analyzable oregon volatile for wide adoption, STRC is designed to relation much similar a yield-enhanced savings account. “If I locomotion down the thoroughfare and you inquire a 100 people, ‘Do you privation a high-yield slope account?’ 99 retired of 100 accidental yes,” helium said, underscoring the simplicity of the pitch.
He believes STRC solves 2 halfway problems: it strips distant semipermanent volatility by targeting abbreviated duration and debased terms fluctuation, and it offers a accordant premium implicit emblematic slope yields. “We’ve stripped down to a one-month duration and it pays 500 ground points supra your slope account,” helium said, describing the instrument’s 9% adaptable monthly dividend.
Importantly, STRC is engineered to commercialized adjacent par ($100), giving investors bid of caput — particularly those delicate to terms swings. Saylor emphasized that erstwhile products mislaid retail traction erstwhile their main worth fluctuated by 5–10%. In contrast, STRC’s extremity is to clasp adjacent to par adjacent arsenic bitcoin prices move, acknowledgment to its dense overcollateralization with BTC.
“If Stretch really hits its par and it trades with debased volatility, past you could, successful theory, merchantability a 100 cardinal dollars of it, 2 100 cardinal dollars of it,” helium told analysts. That, helium argued, would alteration Strategy to massively standard its bitcoin holdings without selling immoderate BTC — efficaciously utilizing its treasury arsenic collateral to monetize liquidity astatine retail scale.
In Saylor’s view, this operation — simplicity, stability, and output — is what makes STRC transformational. Just arsenic the iPhone reimagined however users interacted with mobile computing, STRC could redefine however companies pat superior markets successful a bitcoin-native way.
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