Michael Saylor's Preferred Stock Strategy: A High-Yield Path to Bitcoin Accumulation

Michael Saylor, CEO of Strategy Inc. (formerly MicroStrategy), has long positioned Bitcoin as the cornerstone of corporate strategy. In November 2025, the company unveiled its latest financial maneuver: a €620 million issuance of euro-denominated 10.00% Series A Perpetual Stream Preferred Stock (STRE). This move, while offering investors a compelling yield, raises critical questions about risk-adjusted returns and the sustainability of Saylor's Bitcoin-centric vision.

Key Features of the STRE Preferred Stock

The STRE offering comprises 7,750,000 shares priced at €80 per share, with a stated value of €100 per share. Holders receive cumulative dividends at an annual rate of 10%, beginning December 31, 2025. However, the structure includes a compounding escalator: if dividends are delayed, the rate increases by 1% per quarter, capping at 18% annually. This creates an effective yield of 12.5% for investors, assuming timely payments, according to a Strategy press release.

The liquidation preference is dynamically adjusted daily to reflect the highest of the stated value (€100), the latest sale price, or the 10-day moving average of sale prices. This mechanism aims to protect investors from downside risk while aligning with market conditions, as reported by a Cryptonews report. Notably, the STRE stock is not convertible to common stock, limiting upside potential tied to equity appreciation, according to a Yahoo Finance article.

Financial Rationale: Funding Bitcoin Accumulation

The proceeds from the STRE issuance will directly fund Bitcoin purchases and general corporate activities. At the time of the offering, the €620 million raised could acquire approximately 6,986 additional BTC, further solidifying Strategy's position as one of the largest corporate Bitcoin holders, according to the Strategy press release. Saylor's strategy hinges on Bitcoin's long-term appreciation, leveraging perpetual preferred stock to access capital without diluting common equity.

The compounding dividend structure also serves as a risk mitigation tool. By incentivizing timely payments through escalating rates, the company reduces the likelihood of default-a critical consideration given its speculative credit rating.

Risk Assessment: Credit Rating and Liquidity Mismatch

Despite the attractive yield, the STRE stock carries significant risks. S&P Global Ratings assigned Strategy Inc. a "B-" issuer credit rating, placing it in junk bond territory. The rating agency highlighted the company's heavy reliance on Bitcoin-over 99% of pre-tax profits in 2025 stemmed from Bitcoin's fair value changes-and the liquidity mismatch between USD-denominated liabilities and Bitcoin-denominated assets, as detailed in a FinanceFeeds report.

This mismatch creates a vulnerability: during market downturns, Strategy may be forced to sell Bitcoin at unfavorable prices to meet debt obligations. Additionally, the company's operating cash flow was negative $37 million in the first half of 2025, underscoring its dependence on capital markets for liquidity, according to a CoinCentral article.

Market Response and Secondary Market Liquidity

The STRE IPO, managed by Barclays, Morgan Stanley, and TD Securities, was upsized from €350 million to €620 million, reflecting strong institutional demand, as reported by a Cointelegraph article. The stock's secondary market liquidity remains limited, as it is not available to retail investors in the EU or UK, according to the Cointelegraph article. However, the daily-adjusting liquidation preference and involvement of major underwriters suggest a degree of market confidence.

Risk-Adjusted Returns: A Calculated Gamble

The STRE stock offers a high-yield proposition, but its risk profile demands careful consideration. The 12.5% effective yield is attractive in a low-interest-rate environment, yet it is contingent on Bitcoin's price trajectory and Strategy's ability to manage liquidity. For investors with a high-risk tolerance and a bullish outlook on Bitcoin, the STRE stock could enhance returns. However, the lack of conversion rights and the company's speculative credit rating make it unsuitable for risk-averse portfolios.

Conclusion

Michael Saylor's STRE preferred stock strategy exemplifies the intersection of high-yield finance and speculative asset accumulation. While the 10% dividend with compounding escalators and Bitcoin-backed capital raises offer compelling returns, the risks-concentrated exposure, liquidity mismatches, and a junk-rated balance sheet-cannot be ignored. For those willing to navigate these challenges, the STRE stock represents a unique vehicle for participating in the Bitcoin narrative.