Strategy uses preferred stock to buy more Bitcoin while reducing exposure to market volatility.
The Stretch preferred shares offer an 11.25% dividend to attract stable income investors.
Strategy now holds over 714,000 Bitcoin worth about $48 billion.
Strategy is expanding its preferred stock program to fund more Bitcoin purchases. The company wants to reduce pressure from sharp market swings. Its share price continues to move closely with Bitcoin trends.
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Therefore, management is adjusting its capital strategy. The new approach focuses on stability and steady funding.
Preferred Shares Designed to Reduce Volatility
Strategy now offers additional perpetual preferred shares called Stretch. The product pays a variable dividend that adjusts each month. Currently, the dividend rate stands at 11.25%. Moreover, the company designed the structure to keep the stock near its $100 par value. This design helps reduce sudden price swings.
Preferred shares rank above common stock but below debt obligations. They give investors dividend priority but remove voting rights. As a result, income-focused investors may prefer this structure. In contrast, common shares often move sharply with Bitcoin prices. Therefore, preferred stock provides a calmer alternative.
The company believes this structure attracts investors who want digital asset exposure without extreme volatility. Pension funds and insurers often value predictable returns. Additionally, banks may consider the steady dividend appealing. Consequently, Strategy expects broader institutional participation. This shift supports a more balanced funding model.
Capital Raised Fuels Additional Bitcoin Purchases
Over the past three weeks, Strategy raised about $370 million through common stock sales. In addition, it secured roughly $7 million from preferred share offerings. The company used these funds to buy more Bitcoin. As a result, total holdings now exceed 714,000 BTC. Those holdings carry an estimated value of about $48 billion. The company recently added 1,142 bitcoin for about $90 million.
For years, Strategy relied on capital markets to accumulate Bitcoin. Therefore, its stock often behaves like a leveraged Bitcoin position. When Bitcoin rises, the company’s shares often climb faster. However, when prices fall, the stock declines more sharply. Recently, Bitcoin dropped nearly 50% from its peak.
That decline placed pressure on Strategy’s share price. Consequently, raising capital through common shares became more difficult. Market volatility reduced investor appetite for high-risk exposure. Therefore, management sought a steadier funding channel. Preferred shares now play a larger role in that plan.
Institutional Appeal and Balance Sheet Impact
Preferred stock strengthens the company’s capital structure. Unlike convertible bonds, it reduces refinancing risk. Moreover, it limits sudden dilution for existing shareholders. This approach also avoids adding traditional debt pressure. As a result, the balance sheet gains added flexibility.
Strategy raised about $5.5 billion through several preferred stock offerings in 2025. The latest issuance continues that pattern. In December, Strategy retained its position in the Nasdaq 100 despite concerns over its Bitcoin-focused business model. Meanwhile, the company maintains its commitment to buying more Bitcoin each quarter. The management has shown no intention of selling its holdings. Instead, Strategy continues to build its Bitcoin position despite market swings.
