Bitcoin Buying Spree May Continue With New Preferred Stock Plan: Strategy CEO
Strategy Inc. it doubles down on Bitcoin. The move is intended to calm investors while the company continues to buy the crypto assets that have made it a staple of its identity. Reports say the pivot is focused on expanding the lineup of preferred stocks that consistently trade near $100 and pay reset dividends each month.
Preferred Stocks to Enhance Flexibility
Stretching, often shown as STRC, now sits in the center of that system. According to the Strategy’s own listing, STRC carries an annual dividend reset that currently reads 11.25% and is structured so its price often trades near the $100 mark.
Reports say Strategy CEO Phong Le told Bloomberg that the company will rely more on preferred funds than regular funds to raise funds for future Bitcoin purchases.
Endless Shopping Status
Michael Saylor, the company’s executive chairman, was tight-lipped about the acquisition. Based on the reports, Saylor confirmed that the company will not sell its Bitcoin holdings even if the prices drop significantly, and that Strategy plans to buy each quarter continuously. The comments are intended to confirm owners who have seen the stock move with Bitcoin volatility.
Bitcoin funding buys without hitting the stock price
The logic here is simple. Issue preferred stock that appeals to cash-strapped investors and use the proceeds to buy more Bitcoin, rather than selling common stock or liquidating holdings.
Stretch is marketed as a way for investors to gain exposure while avoiding the same volatility that affects Strategy’s common shares. Some market watchers argue that this shifts the risk to preferred owners, and critics of financial analysis have been talking about the idea of pushing stability through yield products.
How Much Is Bitcoin And What It Means
Reports note that Strategy’s exposed Bitcoin stack remains large, numbering in the hundreds of thousands of coins, and management is pointing to a long-term horizon for returns.
The company’s approach makes its balance sheet look more like a crypto fund than a traditional software concern, and that raises questions about how investors should value the stock versus the underlying asset.
Investor Takeaways and Market Indicators
Investors looking for cash yield without direct exposure to crypto may find preferred stocks attractive. At the same time, preferred shares carry their own risks: profits may be reset, and the company’s obligations to preferred owners compete with the need to manage profits and reserves.
Featured image from Unsplash, chart from TradingView
Planning process because bitcoinist focuses on delivering well-researched, accurate, and unbiased content. We maintain strict sourcing standards, and each page is diligently reviewed by our team of senior technical experts and experienced editors. This process ensures the integrity, relevance, and value of our content to our readers.
