MicroStrategy uses STRC preferreds near $100 to fund Bitcoin purchases

Beincrypto reports MicroStrategy is again leveraging its STRC preferred shares as STRC nears the $100 mark, a move that lets the company raise capital via at-the-market (ATM) sales while limiting dilution of common shares. Analysts say STRC functions as a leveraged Bitcoin play: preferred dividends help fund additional BTC accumulation and could boost shareholder upside if Bitcoin outperforms the 11% dividend rate.

STRC briefly traded at par for four sessions in early November and that move generated roughly $100 million in ATM sales, prompting observers to watch for repeated ATM raises at favorable premiums. Crypto finance analyst Mark Harvey illustrated the mechanics, saying that selling $100,000 of STRC at an 11% yield to buy 1 BTC at $100,000 would create an $11,000 annual dividend obligation and, if BTC rose to $1 million in five years, result in $1 million of BTC held by MicroStrategy after $55,000 of dividends — an $845,000 gain to shareholders ($900,000 capital gain minus $55,000 in dividends).

Risks and next steps remain centered on whether MicroStrategy’s stock will continue to track Bitcoin. Arca CEO Jeff Dorman warned the biggest danger is Bitcoin surging while MSTR fails to follow, which could push MSTR well below mNAV and make ATMs unworkable, potentially forcing consideration of BTC sales to buy back stock.

Key Topics

Crypto, Microstrategy, Strc Preferreds, Bitcoin, Atm Sales, Jeff Dorman