MicroStrategy Series A Preferred Shares Trade at Discount on 11.5% Funding Pressures
STRC•Strategy’s Series A perpetual preferred shares (STRC) with an 11.5% coupon now trade at a discount due to funding cost pressures, with sell-offs choking off cash for Bitcoin purchases. Critics warn this model destroys shareholder value, while proponents highlight Bitcoin’s 55%-60% annualized returns versus gold’s 12% over a decade.
1. Discounted Preferred Shares
Strategy’s Series A perpetual preferred shares yield 11.5% but now trade below par, reducing cash available for Bitcoin acquisitions as funding costs rise.
2. Alleged Shareholder Value Erosion
Critics highlight that issuing discounted preferreds and common stock to fund Bitcoin increases negative yield, potentially eroding shareholder value through dilution and higher financing expenses.
3. Bitcoin Performance Defense
Proponents point to Bitcoin’s roughly 55%-60% annualized return over the past decade, arguing its volatility has driven superior long-term gains compared with gold’s 12% rate.
