Strategy launches preferred shares to reduce volatility

Strategy launches “Stretch” preferred shares with an 11.25% variable dividend to reduce Bitcoin-driven volatility, raise funds for more BTC, and stabilize share prices.

Strategy, formerly known as MicroStrategy, has introduced a perpetual preferred stock named “Stretch” to help offset the volatility affecting its common shares, which is largely due to its significant Bitcoin holdings. Since January, the company’s stock price has dropped by around 17%, prompting this move to reassure investors and provide a less volatile investment option. The “Stretch” preferred shares offer a variable dividend rate of 11.25%, adjusted monthly, and are intended to trade near a $100 par value, aiming to stabilize share prices. Over the past three weeks, Strategy has raised about $370 million through common stock and $7 million via preferred shares, using these funds to increase its Bitcoin holdings to over 714,000 BTC, valued at roughly $48 billion. While the preferred stock represents a small portion of the company’s financing, it is being actively promoted as a tool to enhance financial resilience and provide greater stability for investors amid ongoing market fluctuations.