Strategy Shifts Toward Preferred‑Stock Issuance to Finance Ongoing Bitcoin Accumulation
February 12 2026 | Cointelegraph
Strategy (ticker: MSTR) announced that it will increasingly rely on its perpetual preferred‑stock program, dubbed “Stretch” (STRC), to raise capital for buying Bitcoin, moving away from the issuance of additional common shares, CEO Phong Le told Bloomberg’s “The Close.”
A New Capital‑raising Mix
Since the launch of Stretch in July, the company has used the instrument to fund Bitcoin purchases without diluting existing common‑stock holders. The preferred shares carry a fixed annual dividend of over 11 % and are structured as a perpetual security, meaning they have no set maturity date.
Le said the firm will “transition from equity capital to preferred capital,” indicating that future financing rounds will prioritize STRC over new common‑stock offerings. The shift aims to preserve the market price of MSTR’s ordinary shares while still providing sufficient liquidity for the firm’s treasury‑building strategy.
STRC Hits Its Designated Par Value
At the close of trading on Wednesday, STRC reclaimed its $100 par value for the first time since mid‑January. The price had slipped below $94 earlier in the month when Bitcoin briefly fell under $60,000. The return to par, which Le highlighted as “the story of the day,” could pave the way for additional rounds of preferred‑stock issuance, as the company has set $100 as the minimum price at which it will consider new offerings.
Bitcoin itself has been relatively steady over the past 24 hours, hovering around $66,800 after peaking above $68,000.
Why Preferred Stock, Not Common Equity?
MSTR’s earlier approach of issuing common shares to fund Bitcoin purchases had the side effect of diluting existing shareholders. Preferred stock, by contrast, offers investors a higher, fixed yield and does not directly affect the floating supply of common shares. The perpetual nature of Stretch also provides the company with a stable, long‑term source of capital that can be tapped repeatedly.
Le acknowledged that “the preferred stock will need some seasoning and marketing to attract traders,” but he expects Stretch to become a “big product” for the firm over the course of the year.
Competitive Landscape and Merger Talk
Analysts have warned that the crypto‑treasury niche is becoming crowded, with firms sometimes acquiring rivals to secure Bitcoin at a discount to net‑asset value. Le dismissed the idea of pursuing such acquisitions, likening it to a distraction that could pull focus from the core business. “In any emerging market—whether it’s electric cars, AI, or SaaS—you want to stay focused on your primary product,” he said.
Share‑price Reaction
MSTR’s common stock closed down more than 5 % on Wednesday, finishing at $126.14. The dip reflects broader market concerns about the company’s financing strategy and the recent volatility in Bitcoin’s price.
Analysis
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Capital Efficiency: By leaning on perpetual preferred stock, Strategy can fund Bitcoin purchases while limiting dilution of existing shareholders—an advantage in a market that scrutinizes share‑count expansion.
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Investor Appeal: The 11 %+ annual dividend makes Stretch attractive to yield‑focused investors, especially in an environment where traditional fixed‑income yields are low. However, the high coupon also implies a sizable cash‑outflow that could pressure the company’s balance sheet if Bitcoin’s price underperforms.
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Market Timing: The return of STRC to its $100 par value suggests that investor confidence in the instrument is recovering, potentially enabling the company to launch new rounds without steep discounting.
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Competitive Risks: While Strategy is steering clear of M&A activity, rivals could still outpace it by securing cheaper Bitcoin through acquisitions, putting pressure on Strategy’s buying power and its ability to maintain a cost‑advantaged treasury.
- Share‑price Volatility: The decline in MSTR’s common stock indicates that investors remain cautious about the firm’s financing mix and its exposure to Bitcoin’s price swings. Continued price stability in Bitcoin will be crucial for supporting both the preferred and common equity markets.
Key Takeaways
- Strategic Shift: Strategy will prioritize issuing perpetual preferred stock (Stretch) over common equity to fund Bitcoin purchases.
- Dividend Yield: Stretch offers an annual dividend exceeding 11 %, designed to attract yield‑seeking investors.
- Par Value Milestone: STRC reclaimed its $100 par value, opening the door for possible additional offerings.
- Acquisition Stance: CEO Phong Le dismisses buying rival treasury firms, focusing on core Bitcoin‑accumulation operations.
- Stock Impact: MSTR’s common shares fell over 5 % to $126.14, reflecting market uncertainty about the new financing approach.
- Industry Context: The crypto‑treasury space is becoming more competitive, with potential M&A activity among rivals, though Strategy intends to stay out of that arena.
As the Bitcoin market stabilizes around the $66,000‑$68,000 range, Strategy’s reliance on preferred capital could set a precedent for other crypto‑focused firms seeking to expand treasury holdings without diluting existing shareholders. The effectiveness of this model will likely be judged by the firm’s ability to maintain its dividend commitments while navigating Bitcoin’s price dynamics.
Source: https://cointelegraph.com/news/strategy-ceo-preferred-stock-fund-bitcoin-buys?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
