Strategy Inc’s newest financial instrument is doing exactly what it was designed to do. STRC, the company’s Variable Rate Series A Perpetual Stretch Preferred Stock, is climbing toward its $90 IPO price, while MSTR common shares are sliding more than 7% intraday.

The preferred stock doing its job

STRC has been trading between $88 and $89.50, showing steady upward momentum toward the $90 level. That $90 figure matters because it was the IPO price when the offering closed on July 29, 2025.

The initial public offering raised approximately $2.521 billion in gross proceeds, with net proceeds landing around $2.474 billion. That makes it one of the largest US exchange-listed perpetual preferred offerings in recent memory.

Strategy used those proceeds to buy 21,021 Bitcoin at an average price of approximately $117,256 per coin. The company essentially created a yield instrument, sold it to income-hungry investors, and immediately converted the cash into Bitcoin.

STRC currently pays an annualized dividend rate of 12%, variable and adjusted monthly by the board. The target par value sits at $100, which means buyers at current levels are getting the stock at a discount while collecting a double-digit yield.

MSTR takes the opposite path

While STRC inches upward, MSTR common shares have been doing the opposite. The stock fell over 7% intraday, trading in the low $90s.

One important detail that often gets overlooked: STRC is not collateralized by Strategy’s Bitcoin holdings. None of the company’s preferred share series are. Investors are buying into the company’s creditworthiness and its ability to keep paying dividends, not a direct claim on the Bitcoin sitting in its treasury.

The bigger picture for Strategy Inc

Strategy Inc, formerly known as MicroStrategy, rebranded in August 2025 to signal its evolution into what it calls a Bitcoin Treasury Company.

The 12% annualized yield on STRC, with some market estimates putting the effective yield around 13.4% at recent trading levels, is unusually generous for a preferred stock. For context, most traditional preferred stocks from large US companies yield somewhere in the 5% to 8% range.

What investors should watch

For STRC holders, the key variable is whether Strategy can sustain that 12% dividend. The board adjusts the rate monthly to keep the stock trading near par, which means the yield could go up or down depending on market conditions.

The risk that gets less attention is the structural one. Strategy has built a capital stack where preferred shareholders are paid from corporate cash flows, not from Bitcoin itself. If Bitcoin’s price drops significantly and stays down, the company would need to either sell Bitcoin at a loss to cover dividends, reduce the variable rate, or find alternative revenue sources. The monthly board adjustment mechanism provides flexibility, but flexibility is just a polite word for “we might cut your yield.”