From Nasdaq
February 14, 2025 07:23:00 AM:

MicroStrategy (NASDAQ: MSTR), now Strategy, announced the issuance of preferred stock with an 8% dividend. The security, trading under ticker symbol STRK, offers a 10% yield based on an initial price of $80 per share. As of Feb. 12, it is trading at $90, providing an 8.9% yield.

Preferred shares have no maturity, allowing for indefinite dividend payments. The tech company may delay dividends, but unpaid amounts accumulate. In the event of bankruptcy, bondholders are paid first, followed by preferred shareholders receiving $100 per share plus any unpaid dividends.

The convertible feature allows preferred shareholders to exchange for common shares, with Strategy shares needing to trade around $900 for conversion to be profitable. Preferred stock prices move slower than common stock prices, affected by common stock price changes.

With $46 billion in Bitcoin holdings, Strategy can meet its debt and preferred stock obligations. However, its ability to pay back depends on Bitcoin’s price performance. The nearly 9% yield is higher than many preferred equity ETFs, offering indirect exposure to Bitcoin’s price movement. Understanding the company’s strategy is crucial when considering this security.

Read more at Nasdaq: MicroStrategy’s 8% Preferred Stock: What Investors Should Know