MicroStrategy, which rebranded as Strategy in 2025, is best known as Michael Saylor’s Bitcoin treasury company. But the company has quietly built something else that matters to income investors: a family of preferred stocks designed to raise money for Bitcoin purchases while paying investors a steady yield. The 12% yield at the center of Nick Giambruno’s Financial Underground pitch is one of those preferreds, and understanding the whole family is the best way to understand that one.
Why a Bitcoin Company Issues Preferreds
Strategy has no meaningful operations in the traditional sense. It is a corporate treasury whose entire purpose is to accumulate Bitcoin, and it funds that accumulation by raising money from the market. Early on it used convertible debt, which converts into common stock at a set price. More recently it has added preferred stock to the mix.
The logic is simple. Preferred stock pays a fixed dividend and sits above common stock in the capital structure, which makes it attractive to a different kind of investor, one who wants income rather than a pure Bitcoin bet. By selling preferreds, Strategy raises capital without diluting common shareholders the way a straight equity offering would, and it pays a known, predictable cost for that money.
The Four Preferreds
Strategy has issued four preferred securities, each with a distinct profile.
STRF, nicknamed “Strife,” is the senior-most of the group and pays 10 percent. STRD, or “Stride,” also pays 10 percent but sits lower in the structure. STRK, the “Strike” convertible, pays 8 percent and carries the option to convert into common stock, and it can pay its dividend in MSTR shares rather than cash. STRC, the “Stretch” preferred, pays 12 percent and is the one featured in the promo, with a variable rate that adjusts monthly to keep the shares trading near their $100 par value.
The naming, Saylor’s habit of giving the securities punchy nicknames, is characteristic, but the substance is what matters: each preferred is a different point on the risk-and-yield curve, and the market prices them accordingly.
What “Preferred” Actually Means
Preferred stock sits between bonds and common stock. Holders get their dividends before common shareholders receive anything, and in a liquidation they are ahead of common stockholders but behind bondholders. The trade-off is that preferreds generally have no voting rights and limited upside, they behave more like fixed-income securities than growth stocks.
That fixed-income behavior is exactly what Strategy’s preferreds are engineered to deliver. The monthly rate adjustment on STRC is a mechanism to keep the price stable, which is why it can offer a “paycheck-like” cadence without the wild swings of the common stock. It is a clever structure, and it is real, which we explain in detail in our STRC explainer.
The Risk That Never Goes Away
The one thing all four preferreds share is that their dividends depend on the company being able to pay them, and the company’s ability to pay depends on Bitcoin. Strategy funds dividends by selling Bitcoin or by issuing new securities, a model that works while Bitcoin’s dollar price is rising and gets strained when it falls. During the May and June 2026 selloff, the entire preferred stack sold off, though the senior names fell less than the common.
That is the honest framing for anyone considering these: they are income instruments with less price volatility than MSTR common stock, but they are still a claim on a Bitcoin treasury, not a bond substitute. For the company behind them, our MSTR stock explainer fills in the picture.
The Promo’s Claims, Checked
The Financial Underground pitch makes three specific claims about the instrument, and checking them against the mechanics is instructive. The 12% yield is accurate, and so is the semi-monthly payment schedule, which is genuinely rare among preferreds. The claim that the security is “overcollateralized” by hard assets is directionally true, Strategy’s Bitcoin covers the preferreds several times over at current prices, but the word implies a legal pledge that does not exist. The Bitcoin sits on the general balance sheet, not in a ring-fenced pool dedicated to preferred holders.
The claim of “thirty-two years of coverage” is a solvency ratio dressed up as a reserve. It measures how many years of obligations the company’s assets could theoretically cover if it liquidated today, which is a statement about the strength of the balance sheet, not a dedicated dividend fund that pays you regardless.
None of this makes the preferreds illegitimate. They are real securities with real yields and an unusually transparent structure. It makes the marketing worth reading carefully, and the security worth understanding on its own terms rather than through the adjectives.
Ready to see the research? Click here to access Nick Giambruno’s report.
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