Strategy financing structure shifts to preferred stock: strategic considerations behind perpetual bonds surpassing convertible bonds

Bitcoin Treasury Company Strategy has recently made an adjustment to its financing structure—its perpetual preferred stock has surpassed the size of its convertible bonds. This may seem like a financial detail, but it reflects an important shift in the company’s financing strategy and market recognition of this Bitcoin holdings giant.

Significant Shift in Financing Structure

Strategy’s decision to expand the issuance of perpetual preferred stock is not accidental. According to the latest news, BlackRock’s iShares Preferred and Income Securities ETF has disclosed holdings in Strategy’s perpetual preferred stocks such as STRC, STRF, STRK, and STRD, totaling $471 million, accounting for 3.3% of the ETF’s total assets. This indicates that perpetual preferred stock has become an important tool for institutional investors.

Differences Between the Two Financing Instruments

By increasing the issuance of perpetual preferred stock, Strategy signals a preference for providing long-term stable investment tools rather than exposing investors to bond maturity and equity dilution risks. This is more attractive to institutional investors.

Logic Behind the Financing Strategy

Strategy’s financing approach can be summarized into several core points:

• Continuous financing to expand Bitcoin holdings: Recently raised $1.13 billion to purchase 13,627 Bitcoins, with total holdings reaching 687,410 Bitcoins
• Optimize capital costs: Perpetual preferred stock is more stable and attractive compared to convertible bonds
• Attract institutional funds: Institutional investors like Louisiana State Pension Fund have already allocated to MSTR stock, indicating increased institutional recognition

Market Response and Significance

From the perspective of institutional allocations, Strategy’s innovative financing has gained market recognition. The participation of pension funds, large asset management firms, and other institutional investors indicates that this financing model is viewed as a relatively sound choice.

This shift also reflects a broader trend: Bitcoin treasury companies are evolving from mere “cryptocurrency holders” to “structured financing innovators.” By issuing multi-layered preferred stock products, Strategy offers diversified options for investors with different risk preferences.

Implications for the Bitcoin Treasury Sector

The optimization of Strategy’s financing structure suggests that the Bitcoin treasury sector may enter a new phase. When a company’s holdings are large enough and cash flow is stable, efficient financing becomes a key competitive advantage. Compared to traditional bonds, perpetual preferred stocks offer more flexible and long-term financing options. This model is expected to be adopted by more similar companies.

Summary

Strategy’s perpetual preferred stock surpassing convertible bonds essentially reflects an upgrade in the company’s financing strategy. By issuing more long-term stable preferred stock products, Strategy meets institutional investors’ allocation needs and provides a stable funding source for its Bitcoin expansion strategy. Although this shift appears to be a financial detail, it marks a maturing and professionalizing of Bitcoin treasury companies, with their financing capabilities continuously improving. The next focus is whether this financing model will become industry standard.