Saylor’s Strategy Boosts Preferred Share Sales in Latest Bitcoin Purchase

Michael Saylor’s Strategy Inc. acquired close to $1.6 billion worth of Bitcoin — the company’s largest purchase since January — while leaning more heavily on a security that offers investors an 11.5% annual payout backed by the same cryptocurrency.

The firm, previously known as MicroStrategy, purchased 22,337 Bitcoin between March 9 and March 15, per a regulatory filing released Monday. Around $400 million of the acquisition was financed via common stock sales, while the remaining $1.2 billion came from at-the-market sales of its “Stretch” perpetual preferred shares. These dividend-paying securities, similar to bonds with no maturity date, promise investors a steady yield ultimately funded by Strategy’s Bitcoin holdings.

Last week recorded Strategy’s largest Stretch sale since the product’s initial public offering in July. It was also the first time in weeks that the firm relied primarily on Stretch to fund its Bitcoin purchases. Throughout that period, Strategy has been marketing the securities as a way for investors and corporations to gain Bitcoin exposure without taking on the cryptocurrency’s well-documented volatility.

Strategy has built a tiered funding framework: It issues debt, preferred stock, and equity — all for the purpose of buying Bitcoin. Each tier offers investors a different combination of risk and reward, but every tier is dependent on the same core driver: rising Bitcoin prices.

On Wednesday, Strategy announced an unexpected buyer for its perpetual preferred shares: another company whose balance sheet is closely tied to Bitcoin’s performance. Bitcoin treasury firm Strive Inc. — co-founded by former Republican presidential candidate Vivek Ramaswamy — announced that it allocated $50 million, or more than one-third of its total corporate treasury, to the securities.

Strive, which holds roughly 13,300 Bitcoin, already has significant exposure to the token’s price fluctuations. It is turning to Stretch to generate a double-digit yield on capital reserved to meet its own preferred dividend obligations.

“Rather than holding idle cash that earns low returns in money market funds, we believe it is logical to allocate a portion of those reserves to instruments like Stretch that deliver strong yield performance while maintaining stable pricing and deep liquidity,” Matt Cole, chief executive officer of Strive, said at the time.

Strive issues its own preferred shares carrying a 12.75% dividend, and uses most of the proceeds from these sales to buy Bitcoin. It keeps cash reserves set aside to cover the fixed dividends of its preferred shares. By investing part of its reserve cash into Stretch, which offers an 11.5% yield, instead of treasury bills that yield roughly 3.7%, Strive boosts the income it generates from that cash.

Even so, the firm still pays out more on its own preferred shares than it earns from its reserves — a gap of 1.25%. If Bitcoin rises enough to close that gap, equity holders stand to benefit. If it does not, the preferred dividends still must be paid, reducing the capital available to common shareholders.

“We believe it is prudent for a digital credit issuer to both issue and hold digital credit assets,” Cole noted in an email, adding that Stretch improves the firm’s “balance sheet efficiency while preserving liquidity and security.”

This investment is the first known case of a digital asset treasury using another DAT’s preferred stock to back its own dividend obligations, according to B. Riley Securities analyst Fedor Shabalin, who has a buy rating on Strive’s shares. “The entire DAT growth model depends critically on maintaining an equity premium above net asset value,” he wrote in a research note. “If this premium collapses or shifts to a discount, the virtuous cycle breaks down.”

Strive’s investment is a major bet on both Bitcoin and Strategy. “They are taking on significant risk if Strategy fails to meet its obligations,” said RIA Advisors Portfolio Manager Michael Lebowitz. “All Strive shareholders have every reason to be outraged.”

Stretch’s yield is reset monthly to keep the security trading near its $100 par value. But the $100 price level is not guaranteed — if the company lowers the yield or demand for the security weakens, its market price can drop below par, and investors may face losses if they sell. Last month, the securities fell to as low as $93.67. The stock climbed 14% on Monday.

For Strategy, the preferred shares give Saylor a way to continue buying Bitcoin without further hurting existing common stockholders, as the company’s common stock has dropped roughly 50% over the past 12 months. The stability of Stretch may appeal to investors following a volatile period for Bitcoin in the final months of 2025, including a sharp selloff that severely damaged balance sheets heavy with crypto assets. Bitcoin declined for five consecutive months through February. Shares of Strategy rose 5.6% on Monday.

What makes Strategy’s capital experiment remarkable is not any single instrument — it is that an entire ecosystem of companies have been issuing, buying, and cross-holding securities that all depend on Bitcoin’s price never falling too far for too long. The instruments are designed to cater to different risk appetites, but they all draw value from the same underlying source.

Bitcoin has remained highly volatile this year. The coin was trading around $74,000 on Monday, up more than 10% since the start of the month. These price swings come as global markets face continued pressure tied to the ongoing conflict in Iran. Strategy’s common stock — which is widely considered a Bitcoin proxy and often moves in line with the cryptocurrency — is up roughly 14% this month. The firm holds more than 761,000 Bitcoin valued at approximately $58 billion.