Markets
February 12, 2026
Strategy’s stock price volatility has forced the CEO, Phong Le, to expand the issuance of perpetual preferred shares. The initiative aims to extend investor access to digital capital through Strategy’s perpetual preferred shares. Since the shares utilize a monthly dividend reset mechanism, it will be a core volatility risk mitigation tactic to keep the share price stable near its par value.
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Why Strategy’s Perpetual Preferred Shares Support Its Financing Strategy
Strategy Inc’s common stock tracks the volatile Bitcoin market. Conversely, when Bitcoin enters a downturn, the stock typically falls harder. The decision to lean into Strategy perpetual preferred shares. Unlike traditional convertible bonds, which eventually require repayment or conversion into common stock, perpetual preferred shares offer a permanent source of capital.
The Stretch preferred shares feature a monthly reset dividend mechanism, currently delivering an 11.25% dividend rate. The reset mechanism keeps trading prices anchored around their $100 par value. It’s a masterclass on how the company manages its debt-to-equity ratio. With this structure, Strategy is able to offer a compelling income profile relative to fluctuations seen in common stock. Investors, on the other hand, get digital capital exposure with reduced risk.
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Michael Saylor, Strategy’s Executive Chairman, stated:
“MSTR and STRC operate as complementary components of our capital structure, with STRC generating amplification for MSTR investors and MSTR providing substantial asset coverage while absorbing bitcoin price volatility for STRC investors.“
Navigating Growth and Balancing Volatility Risk
Preferred shares have dwarfed recent common stock sales of roughly $370 million compared to about $7 million raised through perpetual preferred issuances. Using preferred shares as a stabilizer allows the firm to capture Bitcoin’s massive upside while shielding the corporate treasury from the sharp drawdowns.
This framework allows Strategy to keep its reserves. It’s pretty solid such that the dividends can sustain Bitcoin dividends indefinitely.
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Andrew Kang stated:
“We also established a $2.25 billion USD Reserve, providing more than 2.5 years of coverage to support our dividend obligations, further strengthening our credit profile.”
This just goes to prove that even in proving that even in a volatile market, the company can manufacture its own liquidity.
