Analysis: Last week, Strategy primarily used preferred shares as the main financing tool to increase its Bitcoin holdings

According to market news, Strategy last week first used perpetual preferred shares as the main tool to increase its Bitcoin holdings, marking a potential shift in its financing model. The company announced on Monday that it purchased 22,337 Bitcoins, making it the fifth largest acquisition in history. Among this, $1.18 billion was financed through STRC perpetual preferred shares, equivalent to about 16,800 Bitcoins (based on an average price of $70,000), far exceeding the $396 million raised through the common stock ATM program.

The common stock ATM program had previously been the main tool for accumulating Bitcoin holdings, which currently total 761,068 BTC. Based on STRC's current 11.5% dividend yield, the $1.18 billion issuance results in an annual dividend obligation of about $135 million, bringing the company's total annual dividend burden to over $1 billion. The company has set aside about $2.25 billion in reserves to meet these obligations, providing a buffer amid rising financing costs.

Due to the common stock falling over 70%, the company prefers to support its stock price without further diluting equity, thus it will be more selective in using common stock in the future, primarily using it when the net asset value multiple is significantly above 1 or when it needs to build dollar reserves, relying more on STRC financing to avoid issuing new common stock. Since the ex-dividend date on March 15, STRC has fallen below the par value of $100 for three consecutive days; if the one-month volume-weighted average price continues to be below par, the company may consider raising the dividend by another 25 basis points to support the price.