Bitcoin corporate treasury pioneer Strategy (Nasdaq: MSTR), formerly MicroStrategy, has reached a major “healthy” milestone in its capital raising structure.
The company’s preferred shares ($8.36 billion) have for the first time surpassed the total convertible debt ($8.21 billion).
Source: Strategy
To the unfamiliar, convertible debt is like a loan with a maturity date and risk of bankruptcy if someone defaults.
This was Strategy’s main capital raising vehicle from 2020 to 2023, and the risk could escalate during large BTC drawdowns. This debt risk factor hangs over the Strategy, especially leading up to the 2028 maturity date.
But the company unveiled several preferred shares, in addition to its common stock, MSTR, to raise capital for BTC purchases.
Preferred Stock vs. MSTR
Preferred stock, on the other hand, offers a flexible option to raise capital, and payable dividends (not interest) can be deferred because they have no maturity date, like convertible debt.
In other words, without a fixed term and repayment, it reduces bankruptcy risk even during major BTC declines. noted analyst Pio Vincenzo.
“This is a huge milestone for MSTR. It validates the preferred equity strategy and convertible debt transition. The old strategy carried real bankruptcy risk.”
So does Chaintany Jain, an official at Strategy greets the shift is more ‘scalable’ than the old convertible debt.
Analyst Rohan Hirani for his part noted that the heavy reliance on preferred stock would help the strategy ‘dismantle’ bankruptcy-related vulnerability, allowing the company to increase its bet on BTC.
Source:
Others viewed the shift as a ‘structural win’ and a ‘bullish path’ for MSTR’s stock price.
Strategy unveiled its first preferred stock, Strike [STRK]early 2025. Four more preferred shares were later added: Strife [STRF]Step [STRD]Stretch [STRC]and denominated in euros Current [STRE]which was launched in November 2025.
Strategy’s holdings exceed the 700,000 BTC mark
With the preferred stock and MSTR, Strategy has scaled its BTC holdings from 446,000 BTC in December 2024 to 709,000 BTC as of early January 2025.
Over the past year, Strategy has delivered even more Bitcoin buys each worth more than $1 billion.
Source: CryptoQuant
However, MSTR stock price has fallen below $200 since BTC lost $100,000 in November. Still, MSTR has outperformed BTC on a year-over-year (YTD) basis, trading at $163 at the time of writing. Meanwhile, BTC was trading at $89.9k.
Source: Google Finance
Final thoughts
- Strategy has achieved a milestone in its capital raising structure by reducing its debt exposure.
- Analysts believe the shift reduces bankruptcy risk and is ‘bullish’ for MSTR’s stock price in the long term.