Strategy to issue more preferred stock to reduce Bitcoin-linked volatility

Strategy is turning to preferred stock to keep buying Bitcoin while easing pressure from market swings.

Strategy is expanding its use of preferred stock as it looks for new ways to fund Bitcoin purchases while reducing pressure from market volatility. 

The move comes as the company’s share price continues to closely track swings in the cryptocurrency market.

A new approach to managing risk

In a Feb. 12 interview with Bloomberg, chief executive officer Phong Le said the company is offering more perpetual preferred shares to attract investors who want exposure to digital assets without extreme price changes. The product, known as “Stretch,” pays a variable dividend that is adjusted each month.

The current dividend rate stands at 11.25%. The structure is designed to keep the stock trading close to its $100 par value. This helps limit sharp price movements that are common in Strategy’s regular shares.

Preferred shares sit above common stock in the company’s capital structure but below debt. They usually offer a steady income and priority on dividends, while giving up voting rights. This makes them appealing to investors who value stability over rapid growth.

Funding Bitcoin while limiting volatility

Over the past three weeks, Strategy raised about $370 million through common stock sales and another $7 million through preferred shares. The funds were used to buy more Bitcoin (BTC), pushing the company’s total holdings above 714,000 BTC, worth roughly $48 billion.

For years, Strategy’s business model has been built around using capital markets to accumulate Bitcoin. As a result, its stock often behaves like a leveraged version of the cryptocurrency. When Bitcoin rises, the stock tends to surge. When prices fall, losses are often amplified.

Bitcoin has dropped around 50% from its recent peak, which has weighed heavily on Strategy’s shares. This slowdown has made it harder for the company to rely only on common stock sales for funding.

Preferred stock offers another option. The steady dividend and price controls are meant to attract institutions such as pension funds, insurers, and banks. These investors often prefer predictable returns rather than high-risk exposure.

Co-founder Michael Saylor has repeatedly said the company has no plans to sell its Bitcoin. Strategy intends to continue buying more each quarter, regardless of market conditions.

Analysts say preferred shares also strengthen the company’s balance sheet. Compared with convertible bonds, they reduce refinancing risk and limit sudden dilution for existing shareholders.

Strategy raised about $5.5 billion through several preferred stock offerings in 2025. The latest issuance continues that pattern, showing that the company sees long-term value in this funding model.