TLDR
- Strategy Inc. Drops 2.7% After $2.47B Preferred Stock Offering Announcement
- MSTR Falls on Launch of STRC Stock With 9% Dividend, Bitcoin Funding Plan
- STRC Stock Debuts With 9% Yield, Market Reacts Cautiously to Offering News
- Strategy Unveils $2.47B STRC Issue; MSTR Slides Amid Dividend Uncertainty
- MSTR Shares Slip as Strategy Pushes Bitcoin-Backed STRC Preferred Stock
Strategy Incorporated (Nasdaq: MSTR) shares fell 2.70% to $403.72 by 11:03 AM EDT following the announcement of a new stock offering.
The company launched a $2.47 billion preferred stock issuance priced at $90 per share. The move came alongside consistent downward pressure on MSTR stock throughout the morning session.
The offering consists of 28,011,111 shares of Variable Rate Series A Perpetual Stretch Preferred Stock, designated as STRC Stock. The strategy aims to close the transaction by July 29, 2025, subject to customary final procedures. The company priced the shares under an effective SEC shelf registration, handled by a group of joint bookrunners.
The strategy plans to use the proceeds for general purposes, including bitcoin acquisition and operational liquidity. The introduction of variable-rate dividends adds near-term uncertainty around capital allocation.
STRC Stock Offers 9% Starting Dividend with Adjustment Rights
The STRC Stock will begin with a monthly variable dividend rate equivalent to 9% annually on a $100 stated amount. However, Strategy retains the power to adjust this rate monthly under defined limits. Dividend payments will be made in cash at the end of each month, starting August 31, 2025.
Strategy announces pricing of its Stretch Perpetual Preferred Stock ($STRC) Offering and upsizes the deal from $500 Million to $2.521 Billion. $MSTRhttps://t.co/MySRU4bZSA
— Strategy (@Strategy) July 25, 2025
While Strategy can reduce the rate, reductions are capped and tied to movements in the one-month term SOFR rate. The company cannot reduce dividends below SOFR or cut the rate without covering any unpaid prior-period dividends. Strategy has expressed the intention to maintain the STRC trading price close to its $100 par value.
Unpaid dividends will accrue compounded interest until full payment is made. This structure allows dividend flexibility while also protecting holders from prolonged deferrals. The mechanism effectively creates a semi-fixed yield instrument with downside protection for holders.
Redemption Rights and Market Conditions Influence Trading Outlook
Strategy may redeem all or part of the STRC Stock once it is listed on a major exchange such as Nasdaq or NYSE. Any partial redemption must leave at least $250 million in stated value outstanding. The redemption price will be $101 per share, plus accrued but unpaid dividends.
Clean-up and tax redemptions will also be available under specific conditions. Clean-up triggers apply if less than 25% of the originally issued STRC Stock remains outstanding. Tax redemptions may occur if regulatory changes negatively impact the offering’s structure.
The stock includes fundamental change protection, granting holders the right to request repurchase at face value plus unpaid dividends. Meanwhile, liquidation preferences will adjust daily and reflect market pricing or transaction activity. This ensures dynamic pricing tied to market behavior.
Strategy Expands Capital Base Amid Crypto-Linked Strategy
Strategy Incorporated continues to pursue bitcoin-related asset accumulation, leveraging capital markets through equity and preferred instruments. This latest offering enhances its ability to expand digital asset holdings while preserving equity float. The STRC Stock structure gives the firm long-term capital without immediate share dilution.
The offering arrives at a time when digital asset-linked firms face heightened scrutiny and volatility. Strategy has remained committed to bitcoin as a treasury asset, and this issuance aligns with its financial roadmap. However, MSTR’s market decline signals that the move raised concerns over risk exposure and payout sustainability.
Morgan Stanley, Barclays, Moelis & Company, and TD Securities led the underwriting, supported by a broader group of financial partners. The offering builds on Strategy’s previous fundraising history, further diversifying its capital sources. STRC Stock will trade independently from MSTR and reflect distinct valuation factors.
