Strategy, formerly MicroStrategy, has launched a new preferred stock called Stride (STRD), offering investors a 10% yield while providing the company with fresh capital to purchase more Bitcoin. This move has sparked debate within the crypto community about its financial implications and sustainability.
What is STRD and How Does It Work?
On June 2, 2025, Strategy announced its intention to conduct an initial public offering of 2.5 million shares of its 10.00% Series A Perpetual Stride Preferred Stock (STRD). This new stock offering is priced at $100 per share, potentially raising $250 million for the company .
STRD joins Strategy’s existing financial instruments—MSTR (common stock), STRK (Strike), and STRF (Strife)—expanding what some call the company’s “Bitcoin engine.” The key features of STRD include:
• 10% annual dividend rate, higher than STRK’s 8%
• Non-cumulative dividends paid quarterly if declared by the board
• First potential dividend payment scheduled for September 30, 2025
• Zero fees, making it attractive for long-term investors
• Lower seniority compared to STRF in Strategy’s capital structure
According to Strategy’s press release, the proceeds will be used for “general corporate purposes, including the acquisition of bitcoin and for working capital.”
Market Reception and Concerns
The announcement has received mixed reactions from investors and analysts. Some critics question whether this move indicates financial trouble at Strategy, suggesting the company might be running low on cash and seeking quick capital.
Concerns raised by market observers include:
• Questions about the source of funds for dividend payments
• Potential dilution of common stock (MSTR) if used to fund STRD dividends
• Risk that Strategy might need to sell Bitcoin if equity sales fall short
• Similarities to a Ponzi-like structure where new investor funds pay existing investors
Strategy’s reported $4.22 billion net loss in Q1 2025 has only intensified skepticism about the sustainability of its aggressive Bitcoin acquisition strategy.
The Bull Case for STRD
Despite concerns, many Bitcoin enthusiasts and Strategy supporters view STRD as a strategic financial innovation. With Bitcoin currently trading above $100,000, Strategy’s substantial debt position (over $8 billion) appears manageable to bulls .
Proponents highlight several advantages of the STRD offering:
• Provides Strategy with relatively inexpensive capital without diluting existing shareholders
• Dividend payments are optional, giving the company flexibility during market downturns
• Strategy can redeem all shares if less than 25% of the originally issued stock remains outstanding
• Appeals to traditional finance investors who want Bitcoin exposure without directly owning the cryptocurrency
The offering is being managed by major financial institutions including Barclays, TD Securities, and Morgan Stanley, lending credibility to the issuance .
Strategic Implications for Bitcoin Markets
Strategy’s continued financial engineering has broader implications for Bitcoin markets. By raising capital to purchase more Bitcoin, the company effectively reduces available supply while creating synthetic investment vehicles that provide indirect exposure to the cryptocurrency.ƒ
This latest move follows Strategy’s recent purchase of 705 BTC on June 2, demonstrating the company’s unwavering commitment to its Bitcoin accumulation strategy .
Whether STRD represents brilliant financial innovation or concerning financial engineering likely depends on Bitcoin’s future price performance and Strategy’s ability to manage its increasingly complex capital structure.
