How Michael Saylor Turned Preferred Stock Into Jet Fuel For Buying Bitcoin

MicroStrategy has become the world's largest institutional Bitcoin holder, surpassing BlackRock. This was fueled by a recent $2.54 billion Bitcoin purchase, bringing their total holdings to over 815,000 BTC. The funding for this acquisition comes primarily from "Stretch" (STRC), a high-yield perpetual preferred stock. This strategy replaces previous methods like selling convertible notes and common stock, which became less effective as Bitcoin's price fluctuated. STRC, launched in July, offers a 9% coupon and is designed to be self-correcting, with a mechanism to adjust dividends and issue more stock. Michael Saylor, MicroStrategy's chairman, views STRC as a pivotal instrument, potentially unlocking significant capital. STRC has experienced massive trading volume and market capitalization, becoming the world's largest preferred equity. Retail buyers are attracted to its high yields and tax-deferred dividend treatment.