• In the past week, Strategy Inc. announced an expanded preferred stock offering in Europe, raising approximately €620 million through the sale of 7.75 million shares of 10% Series A Perpetual Stream Preferred Stock to support further Bitcoin acquisitions and working capital.

• This move highlights the company’s growing reliance on high-yield financing and persistent pursuit of Bitcoin accumulation, even as the cryptocurrency market experiences heightened volatility.

• We’ll explore how Strategy Inc.’s increased use of preferred stock offerings for Bitcoin purchases shapes its investment narrative amid evolving funding risks.

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Owning shares in Strategy Inc. right now means buying into the conviction that Bitcoin will continue to gain relevance as a corporate treasury reserve asset, and that the company’s ongoing ability to raise capital, now often through high-yield preferred shares, won’t be overwhelmed by future cash obligations. The recent €620 million preferred stock offering in Europe signals Strategy’s shift toward higher-cost financing as its Bitcoin premium narrows and common share offerings become less attractive. This move brings the risk of mounting dividend commitments, adding pressure on already sizable annual payouts and raising questions about flexibility during crypto downturns. In the short term, while the preferred share issuance may not resolve the stock’s recent slide or insulate against further price swings tied to Bitcoin, it may shift focus to the quality and sustainability of capital raising versus pure Bitcoin exposure. For investors, the most pressing questions now hinge on balance sheet durability and resilience to volatility rather than near-term growth catalysts.

But investors shouldn’t overlook how recurring high-yield dividends can strain cash reserves if Bitcoin weakens further. Insights from our recent valuation report point to the potential undervaluation of Strategy shares in the market.

Fair value estimates from the Simply Wall St Community span US$500 to US$663, with six distinct views capturing wide-ranging expectations for Strategy’s outlook. As shareholders weigh these opinions, the risk of rising financial obligations linked to new preferred share issues remains front of mind, potentially influencing the company’s future performance under shifting Bitcoin conditions. Explore these differing viewpoints to see the full picture.