Comparing Strategy’s Preferred Stock: Key Differences Between STRF and STRK

Strategy Closes $711M STRF Offering as Bitcoin-Centric Funding Expands

25/3/2025

Strategy (MSTR), the company known for its aggressive bitcoin (BTC) acquisition strategy, has successfully raised $711 million through its latest financial instrument, STRF. The perpetual preferred stock offering, which exceeded its initial $500 million target, is set to close later Tuesday.

This marks the second Series A preferred issuance for Strategy, following STRK, which previously raised $563 million. The STRF sale includes 8.5 million shares priced at $85 each.

STRF: High-Yield Stability for Investors

Designed for stability, STRF offers a fixed 10% annual dividend on a $100 stated amount, with payments made quarterly. If Strategy fails to pay a dividend on time, the rate increases by 1% annually, reaching a maximum of 18%. Unlike common shareholders, STRF holders do not have voting rights, but they benefit from a predictable income stream and lower volatility.

Strategy can redeem STRF shares under certain conditions, such as tax-related events or if fewer than 25% of the original issuance remains. In such cases, investors receive the liquidation preference along with any accrued dividends.

Comparing STRF & STRK

While STRF emphasizes consistent income, STRK—Strategy’s first preferred stock—offers an 8% annual dividend and an equity upside. STRK holders can convert their preferred shares into common stock at a 10:1 ratio if Strategy’s share price reaches $1,000. This feature provides additional capital appreciation potential, making STRK appealing to investors looking for both yield and growth.

By contrast, STRF functions more like a fixed-income asset, making it a strategic choice for those prioritizing stability over market fluctuations.

Funding Strategy & Bitcoin Accumulation

Strategy plans to fund its dividend obligations through a mix of operational cash flow, convertible debt offerings, and at-the-market (ATM) sales of its common stock. The company has also used its ATM program to expand its bitcoin holdings, most recently adding 130 BTC.

With $3.57 billion in remaining ATM capacity, Strategy remains well-positioned to maintain its dividend commitments while continuing to acquire bitcoin. The company’s stock surged over 10% on Monday as its BTC holdings reached 506,137.