What are MSTR, STRK and STRC? Strategy’s stock and preferred shares explained
Strategy, a digital asset treasury company, uses its common stock (MSTR) and various preferred shares (like STRK and STRC) to perpetually fund Bitcoin accumulation.Summary
Strategy (formerly MicroStrategy) functions as a digital asset treasury, primarily focused on accumulating Bitcoin by raising cash through issuing financial products. Its core mechanism involves selling common stock (MSTR) when the equity trades at a premium (mNAV > 1.0), a process called "accretive dilution" where new shares increase the net asset value per share.
When sentiment is poor or the stock trades at a discount, Strategy uses alternative fundraising methods like issuing preferred shares (STRF, STRE, STRK, STRC, STRD) or corporate debt notes. Preferred shares act like a hybrid of stock and bonds, offering fixed or variable dividends and priority over common stockholders in payouts, but lacking voting rights. For example, STRK offers a cumulative 8% dividend and is convertible to MSTR, while STRC has a variable dividend targeting a $100 price.
The capital structure prioritizes payouts: senior credit notes are first, followed by preferred shares (STRF/STRE being the most senior preferred), and finally common stock (MSTR) is last. Dividends, totaling about $1 billion annually, are primarily funded by ongoing stock offerings, with the legacy software business contributing modestly. If funds fall short, common stockholders (MSTR) are the most exposed to potential dividend halts or delays.
(Source：The Block)