Last week, Strategy overtook BlackRock, issuer of the world’s largest bitcoin exchange-traded fund, IBIT, to become the world’s largest institutional holder of bitcoin. The milestone followed yet another enormous purchase: between April 13 and April 19, according to a recent Securities and Exchange Commission filing, Strategy bought $2.54 billion worth of bitcoin, its largest acquisition since November 2024. The purchase brought the company’s total holdings to 815,061 BTC—about 3.88% of bitcoin’s fixed 21 million supply—currently worth around $65 billion. The only larger holder is thought to be Satoshi Nakamoto, the elusive founder of the cryptocurrency who disappeared 15 years ago.

The funding for Strategy’s latest bitcoin buying spree is not coming from flooding the market with common shares or convertible debt, but mainly from what traders affectionately call “Stretch,” a high-yield perpetual preferred stock the company has been issuing under the symbol STRC. Saylor, Strategy’s chairman, has been touting Stretch as the critical underpinning of the next phase of his bitcoin empire.

From 2020 through 2024, Strategy financed its bitcoin binge largely by selling convertible notes and issuing common stock. It was a shrewd display of financial engineering while it lasted. As bitcoin climbed and investors bid Strategy shares to eye-popping premiums over the value of the company’s underlying bitcoin, Saylor could keep issuing more bonds convertible into stock and selling common shares to hedge funds and other investors anticipating a windfall. At points, the stock traded at two to three times the value of bitcoin on its balance sheet.

But that model began to hit a wall when bitcoin started falling in early 2025. Convertible buyers wanted downside protection and income. Common shareholders faced massive dilution. Then the stock premium began to vanish. But Saylor wanted more bitcoin.

So in 2025, Strategy broadened its financing arsenal, introducing a series of preferred-stock offerings that Saylor, with characteristic flourish, packaged as “digital credit,” emphasizing steady income. STRC soon emerged as the flagship product. Launched last July at a price of $90 with a 9% coupon, it was designed to trade at $100 par value while paying a monthly dividend. The structure is meant to be self-correcting: if the shares fall too far below par, Strategy can sweeten the dividend to draw buyers back in; if they rise above $100, the company can issue more preferred stock through an at-the-market program, adding supply and capping the price. The genius was convincing investors that STRC offered a safe way to buy bitcoin, even though the preferred shares have no direct claim on the bitcoin hoard Strategy has been adding to with the proceeds. STRC currently yields 11.5% and its price, currently at $99.59, has dipped below $95 only three times in the past nine months.

Saylor calls........

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