TYSONS CORNER, Virginia – Shares of Strategy Inc (MSTR) rose 5.3% on Thursday, riding a broader cryptocurrency rally, but a new analyst report has refocused attention on the company's reliance on preferred-stock financing to fund its Bitcoin acquisitions. The company is seeking shareholder approval to change the dividend schedule on its STRC perpetual preferred shares, a move that could impact its ability to continue buying Bitcoin at its current pace.
In a proxy filing dated May 13, Strategy's board is asking holders to approve a semi-monthly dividend schedule for its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC). The change, which would split the current monthly dividend into two equal payments, is designed to reduce reinvestment lag and improve liquidity, according to Chief Financial Officer Andrew Kang. The annual dividend rate remains at 11.50%, with the payout adjusting monthly to keep the shares near the $100 par value. The vote is scheduled for the company's annual meeting on June 8.
The preferred stock has no set maturity date, making it a perpetual instrument. Strategy has used STRC as a key funding source for its Bitcoin purchases, but the program has a $28.3 billion issuance cap, which could become a limiting factor if the company cannot increase capacity or shift more toward selling common shares. According to Delphi Digital, the cap represents a potential constraint on Strategy's ability to continue its aggressive Bitcoin accumulation strategy.
Strategy's most recent Bitcoin purchase, announced May 11, involved 535 Bitcoin for approximately $43 million, at an average price of $80,340 per coin. The purchase was primarily funded by the sale of 231,324 common shares, with only $0.1 million drawn from STRC. This brings Strategy's total Bitcoin holdings to 818,869 Bitcoin, making it the largest corporate holder of the cryptocurrency.
Analysts at Delphi Digital noted that Strategy's market net asset value (mNAV) stood at 1.25 times on Thursday, a key metric comparing the company's market value to the value of its Bitcoin holdings. According to Delphi's head of research, Ceteris, “Strategy will use STRC as its main accumulation vehicle as long as MSTR mNAV stays low.” However, the report highlighted a core challenge: a capped preferred-stock program may not be sufficient if Bitcoin buying remains central to the strategy.
Strategy's management, led by Executive Chairman Michael Saylor, has a different view. In its Q1 update, the company reported that STRC raised $5.58 billion so far this year through May 3. Saylor argued that the planned semi-monthly dividend schedule could help bolster both liquidity and price stability for the product.
Despite its software operations, Strategy is overwhelmingly viewed as a Bitcoin proxy. For the first quarter, the company posted an operating loss of $14.47 billion, nearly all of which ($14.46 billion) was tied to an unrealized loss on its digital assets. Revenue rose 11.9% to $124.3 million. The company's own risk factors highlight that Bitcoin's volatility, financing hurdles, and debt service could all impact results. In its KPI section, Strategy notes it might need to sell common shares or Bitcoin if certain instruments come due or are redeemed, which would undermine its pitch to investors about Bitcoin-per-share value.
Market sentiment remains cautious. On Kalshi, the odds of Bitcoin topping $100,000 before January 2027 stand at 46%, while Polymarket gives a 17% chance of a new all-time high by December 31, 2026. For Strategy, a stronger Bitcoin price helps maintain the premium needed to access capital markets, but a stall in prices could make fundraising more difficult.
Among its peers, Japan's Metaplanet holds 40,177 Bitcoin, a fraction of Strategy's massive pile, but it signals that the copycat trade continues. Strategy remains the dominant corporate Bitcoin holder, and its capital structure is now as closely scrutinized as the cryptocurrency itself.
