Strategy Aims For More Bitcoin With 'Strife' Stock: How Does It Work?

Strategy MSTR, the company formerly known as MicroStrategy, has introduced a new financial instrument with a striking name and unconventional structure: the "Series A Perpetual Strife Preferred Stock."

What Happened: This latest issuance is part of the firm's ongoing efforts to fund its aggressive Bitcoin BTC/USD accumulation strategy, and it arrives with terms that diverge sharply from conventional fixed-income products, according to the Financial Times.

While the name "Strife" might sound like a typo, the term appears repeatedly in regulatory documents — a deliberate branding choice that may nod to the volatility and tension often associated with Strategy's Bitcoin-centric approach.

Unlike earlier instruments such as its STRK preferred shares, which allowed conversion into equity, this new offering does not include conversion rights.

Instead, it pays a fixed 10% annual dividend, strictly in cash — no stock options or alternatives.

However, if the company defers payment, the dividend rate increases by 1% annually, up to a ceiling of 18%.

Importantly, the board retains the authority to suspend dividends entirely, making investor returns far from guaranteed.

Also Read: Bitcoin Could Replace Tesla In ‘Magnificent 7’ To Boost Returns, Reduce Volatility: Standard Chartered

Why It Matters: The product presents an unusual trade-off: fixed-income investors are exposed to the downside risk of Strategy's substantial Bitcoin holdings, but receive no additional benefit if the cryptocurrency's value surges.

That asymmetric structure has raised questions about its appeal, particularly since the firm is not relying on operating revenue to fund dividends.

Instead, filings indicate Strategy may raise new capital — including by selling additional common stock or other securities — to meet payout obligations.

At the time of launch, Strategy reportedly held under $50 million in cash, with its core software business continuing to post losses.

Covering cash dividends on hundreds of millions in preferred stock may require sustained issuance of new instruments, heightening the dilution risk for existing shareholders.

Still, major financial institutions — including Morgan Stanley, Barclays and Citigroup — are backing the offering as underwriters.

Fidelity is also involved in distributing the product to retail investors, signaling confidence in the firm's ability to attract buyers despite the product's unusual design.

In many ways, the "Perpetual Strife" name feels fitting. It reflects both the tension around Strategy's all-in Bitcoin thesis and the unconventional means the firm continues to employ to fund it.

Whether investors see this as bold innovation or excessive risk-taking will likely depend on their appetite for exposure to Bitcoin — and their faith in Strategy's unrelenting commitment to the asset.

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