Strategy Shifts Capital Raise to Preferred Stocks as Common Share Issuance Loses Allure
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James Van Straten
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By James Van Straten|Edited by Sheldon Reback
Jun 10, 2025, 9:23 a.m.
- Strategy’s latest bitcoin purchases were funded by STRK and STRF at-the-market sales, both benefiting from rising share prices and lifetime returns.
- Analyst Jeff Walton notes that the effective dividend yields of the preferred stocks have risen even as the U.S. 10-year yield held steady, driving further upside in preferred stock valuations.
Disclaimer: The analyst who wrote this piece owns shares of Strategy (MSTR).
Over the past two weeks, Strategy (MSTR) has refrained from utilizing the at-the-market (ATM) equity program on its common shares to fund bitcoin
purchases, choosing instead to use the programs on its two perpetual preferred stocks.
The choice most likely reflects the narrowing premium between the company’s share price and its multiple net asset value (mNAV) or, more colloquially, the difference between its market cap and the value of its bitcoin holdings, and allows Strategy to raise funds to buy more BTC without diluting shareholders’ stakes in the company.
STORY CONTINUES BELOW
When the share price trades close to the underlying bitcoin asset value, issuing common shares via ATM becomes less attractive. Such offerings are typically only advantageous when executed at a meaningful premium.
Strategy funded its most recent 1,045 BTC purchase using proceeds from its two perpetual preferred stock ATMs: 59.18% from the STRK offering and 40.82% from the STRF one. These preferred stocks have demonstrated strong lifetime returns of 35% for STRK and 24% for STRF. This gives the company greater flexibility to continue accumulating bitcoin while preserving upside for common stock investors.
There’s also an additional dynamic at play, according to analyst Jeff Walton. The effective dividend yields of STRK and STRF have steadily declined from about 10% even though the yield on the benchmark U.S. 10-year Treasury has remained relatively constant at 4.5%. That’s because the dividend yield falls as the price of the stock increases, a bond-like behavior that makes the preferred shares more attractive in a stable rate environment.
Strategy is likely to reengage the ATM on its common stock if the share price rises significantly, particularly if it exceeds twice the mNAV, which would allow room for dilutive issuance at a premium. While the common stock ATM remains the primary mechanism to fund dividend obligations on the preferred shares, Strategy retains the option to use the preferred stock ATMs for this purpose as well, depending on market conditions.
James Van Straten is a Senior Analyst at CoinDesk, specializing in Bitcoin and its interplay with the macroeconomic environment. Previously, James worked as a Research Analyst at Saidler & Co., a Swiss hedge fund, where he developed expertise in on-chain analytics. His work focuses on monitoring flows to analyze Bitcoin’s role within the broader financial system.
In addition to his professional endeavors, James serves as an advisor to Coinsilium, a UK publicly traded company, where he provides guidance on their Bitcoin treasury strategy. He also holds investments in Bitcoin and Strategy (MSTR).
