MicroStrategy Shifts to Preferred Stock for Bitcoin Buys | BTC Holdings Update

Strategy (MSTR) is increasingly reliant on its preferred stock offerings to fund its substantial Bitcoin acquisitions, a shift that signals a potential evolution in the company’s financing strategy. The latest weekly purchase, announced Monday, saw the addition of 22,337 BTC, representing the fifth-largest acquisition in the company’s history, and was largely financed through the issuance of its STRC series of perpetual preferred stock.

The company acquired the Bitcoin for $1.57 billion, with $1.1 billion coming from STRC preferred stock sales and $396 million from sales of common stock, according to a company filing. This marks a significant departure from previous funding methods, where at-the-market (ATM) sales of common stock were the primary source of capital for Bitcoin purchases. The move comes as Strategy’s common stock has experienced a decline of over 70%, potentially incentivizing the company to avoid further dilution of common shares.

Preferred Stock Takes Center Stage

The reliance on STRC preferred stock is notable due to its implications for Strategy’s dividend obligations. The $1.1 billion issuance carries an approximate annual dividend burden of $135 million, based on STRC’s current 11.5% dividend rate. This pushes the company’s total annual dividend obligations above $1 billion. However, Strategy maintains a substantial reserve of approximately $2.25 billion in USD to cover these obligations, providing a buffer against rising capital costs.

The shift towards preferred stock funding also reflects a strategic consideration of market conditions. With the company’s common stock under pressure, utilizing preferred stock allows Strategy to support its share price without further diluting existing common shareholders. Common equity may now be used more selectively, primarily when the company’s market valuation relative to its net asset value (mNAV) is significantly above 1, or when building USD reserves is a priority. This suggests a reduced reliance on common stock sales and a greater emphasis on STRC, which avoids issuing new common shares.

Bitcoin Holdings and Market Context

As of today, March 17, 2026, Strategy’s total Bitcoin holdings stand at 761,068 BTC, acquired at an average cost of $75,696 per coin, representing a total investment of $57.61 billion. The recent purchase was made at an average price of $70,194 per coin. Bitcoin was trading at $73,600 on Monday morning, a 2.6% increase over the past 24 hours, according to the company’s announcement. You can find current Bitcoin pricing on Finnhub.io.

The company’s aggressive Bitcoin acquisition strategy is spearheaded by Executive Chairman Michael Saylor, who has positioned Strategy as the world’s largest publicly traded holder of Bitcoin. This strategy has drawn both praise and scrutiny, with investors closely monitoring the company’s financial performance and the volatility of the cryptocurrency market.

Dividend Pressure and Potential Adjustments

The increased reliance on STRC preferred stock isn’t without potential challenges. The preferred stock has shown early signs of pricing pressure, trading below its $100 par value for three consecutive days following its March 15 ex-dividend date. With its one-month volume-weighted average price below par, Strategy may consider increasing the dividend by a further 25 basis points to bolster the price and maintain investor confidence.

This potential dividend increase would further elevate the company’s overall dividend burden, requiring careful management of its USD reserves and a continued assessment of market conditions. The company’s ability to navigate these challenges will be crucial to sustaining its Bitcoin acquisition strategy.

Implications for Investors

The shift in funding strategy has implications for both common and preferred shareholders. Common shareholders may benefit from reduced dilution, potentially supporting the share price. However, they also bear the risk of increased dividend obligations associated with the preferred stock. Preferred shareholders, while receiving a fixed dividend, are exposed to the risk of a potential dividend reduction if the company faces financial pressures.

The company’s financial performance will be closely watched by investors, particularly its ability to generate sufficient cash flow to cover its dividend obligations and continue funding its Bitcoin acquisitions. The success of this strategy hinges on the continued appreciation of Bitcoin and the company’s ability to effectively manage its capital structure.

What’s Next for Strategy?

Strategy’s next steps will likely involve continued monitoring of the STRC preferred stock price and a potential adjustment to the dividend rate if necessary. The company will also continue to assess market conditions and explore opportunities to acquire Bitcoin at favorable prices. Further details regarding the company’s Bitcoin strategy and financial performance will be provided in its upcoming quarterly earnings reports. Investors should also monitor filings related to potential future preferred stock issuances and any changes to the company’s dividend policy. A deeper dive into Strategy’s path to potentially holding 1 million Bitcoin by the complete of 2026 can be found at CoinDesk.

You can review Strategy’s Bitcoin purchase history directly on their website: Strategy Bitcoin Purchases.