Bitcoin News Today: Michael Saylor Launches $2.5 Billion Stretch Offering to Fuel Bitcoin Strategy

Michael Saylor, chairman of Strategy Inc. (formerly MicroStrategy), has embarked on an ambitious financing experiment by introducing a novel form of perpetual preferred stock to fund his company’s ongoing Bitcoin accumulation. The initiative, dubbed “Stretch,” aims to shift away from traditional sources of capital, such as common stock and convertible bonds, and instead rely on preferred securities that never mature and allow the company flexibility in dividend payments. These instruments, which offer no voting rights and variable dividend rates, are intended to build a so-called “BTC Credit Model” — a financial structure where Bitcoin, a volatile asset, underpins a stream of income securities. Saylor envisions the potential for raising as much as $100 billion, or even $200 billion, through this model, though its success depends heavily on continued investor and retail demand [1].

So far in 2025, Strategy has raised approximately $6 billion through four perpetual preferred offerings, with the latest $2.5 billion “Stretch” tranche being one of the largest crypto capital raises of the year. Nearly a quarter of the latest offering was attributed to retail buyers, a notable divergence from the typical institutional-heavy preferred market. This retail tilt has been praised as a unique strategy by some analysts, with Bank of America’s Michael Youngworth noting that he is unaware of any other company leveraging retail fervor in this manner [1].

The preferreds issued by Strategy are junior in structure compared to debt and sit above common stock but are subordinate to convertible bonds. This means that in the event of financial distress, preferred investors would have limited protections. Additionally, the company’s preferreds allow for dividend deferrals and non-cumulative payouts — meaning investors do not receive arrears for missed payments. These features make the securities more attractive to the issuer but less so to conservative investors [1].

The company has raised over $40 billion since the start of 2024 through a combination of common equity and fixed-income offerings. A key part of Strategy’s pivot is to move away from convertible notes, which require repayment or conversion and can dilute existing shareholders. CEO Phong Le emphasized that the goal is to build a more resilient capital structure, contrasting with the company’s struggles during the 2022 "crypto winter." He suggested that over time, Strategy may rely entirely on perpetual preferred notes as its primary funding vehicle [1].

However, the model is not without significant risk. Paying large, ongoing dividends in perpetuity using an asset like Bitcoin, which has historically been volatile and lacks intrinsic income generation, poses challenges. If Bitcoin’s price drops and investor interest wanes, Strategy could find itself struggling to meet obligations without the ability to sell Bitcoin — a move Saylor has long resisted. The company has also indicated it may sell common stock at prices below its typical 2.5 net asset-value (NAV) threshold to cover preferred dividends or debt interest, further diluting existing shareholders [1].

Clear Street’s Brian Dobson highlighted that the company’s mNAV premium — the gap between the stock price and net asset value — has recently compressed, raising concerns about excessive dilution. He suggested management is taking the right steps to mitigate this risk but emphasized that the preferred model brings new challenges [1].

Short seller Jim Chanos has criticized the approach, calling the non-cumulative preferreds “crazy” for institutional buyers. He noted that the lack of cumulative dividends and the perpetual nature of the obligations provide the company with significant flexibility but pose risks for investors. Chanos believes the preferred push may be an attempt to increase leverage and has suggested a short position against the stock while holding Bitcoin, betting the premium will collapse [1].

The broader market may also pose a challenge. As digital-asset treasury companies like Strategy pile on risk, concerns about a potential bubble are growing. Rutgers Law School’s Yuliya Guseva warned that if market appetite dries up, the financial model underpinning these firms could become unsustainable [1].

The success of Saylor’s vision hinges on two key factors: the continued value of Bitcoin and sustained investor confidence. If both hold, the company may bring Bitcoin closer to being treated as mainstream financial collateral. If not, the balance sheet could serve as a cautionary tale of overleveraging a volatile asset to create an income stream [1].

Source: [1] Michael Saylor bets on a $100 billion Bitcoin ‘credit’ dream (https://fortune.com/crypto/2025/08/15/michael-saylor-microstrategy-strategy-perpetual-preferred-stocks/)