Strategy Revamps Capital Raise Using Perpetual “Stretch” Preferreds

Strategy US5949724083

Strategy, previously known as MicroStrategy, is recalibrating its capital strategy after ongoing pressure on its stock. CEO Phong Le unveiled the plan yesterday, pitching it to investors who want bitcoin-linked returns but wish to avoid the stock’s pronounced swings.

The initiative centers on a new financing channel designed to be less tightly tied to the daily volatility of MSTR. The big question remains: can this structure actually smooth the company’s access to capital?

• New instrument: perpetual preferred shares ("Stretch")
• Target par value: close to $100
• Current dividend: 11.25% (variable, adjusted monthly)
• Last Bitcoin purchase: 1,142 BTC for around $90 million
• Total holdings: more than 714,000 BTC (recently valued at about $48 billion)

In an interview with Bloomberg Television, Le described Stretch as engineered to trade near a $100 par value. A variable dividend mechanism is at the core: the current yield sits at 11.25% and is reset each month. The reset feature is intended to keep the preferred shares’ price steadier than that of the common stock.

Le framed the move as a strategic expansion of the investor base. It targets investors seeking exposure to Bitcoin, but not the substantial price volatility seen in the common shares (MSTR). The change also responds to the practice of using the highly priced common stock to fund further Bitcoin acquisitions.

Stock Under Pressure, Bitcoin Purchases Continue

The restructuring comes amid a turbulent period: the stock slipped roughly 5% on Wednesday and is down about 17% year-to-date. It has also moved well away from the highs reached in November 2024.

Strategy remains committed to its Bitcoin strategy. Company disclosures show that between February 2 and February 8, 2024, Strategy bought 1,142 BTC for around $90 million. The holding total now exceeds 714,000 BTC, valued at roughly $48 billion based on recent prices.

Why Strategy Is Pivoting

The reported driver is a changed market environment: the premium of MSTR shares over the value of the Bitcoin held has narrowed. That dynamic makes capital raises via the common stock less attractive because dilution becomes a more immediate concern.

By using Stretch, Strategy aims to secure financing for additional acquisitions while limiting dilution to common shareholders. Technical analyses from yesterday place the stock below key moving averages, and momentum indicators signal an oversold condition. Le’s central idea is to fund further purchases through Stretch rather than relying directly on the day-to-day swings of the crypto market.

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