Strategy Inc (NasdaqGS:MSTR) has announced plans to issue additional perpetual preferred shares, named Stretch, as part of an effort to continue its Bitcoin accumulation strategy. This decision signifies a shift in the company’s funding approach, moving more towards preferred equity rather than common equity to mitigate concerns regarding shareholder dilution.
The company’s management has reiterated its commitment to expanding its Bitcoin holdings, despite the volatile market conditions that have led to significant unrealized losses—reported at around $4.5 billion. The firm has ruled out forced sales of its cryptocurrency assets, indicating a long-term investment strategy.
Currently trading at $133.88, Strategy’s stock performance is closely tied to Bitcoin sentiment. The share price has seen a decline of 25.3% over the past 30 days and a year-to-date drop of 14.8%. Over the last year, the stock has faced a staggering 60.4% decline. Despite these setbacks, investors have seen substantial returns over the past three years, with a 5-year return sitting at 38.9%.
For investors, a critical consideration is whether the new Stretch funding model aligns with individual risk tolerance and investment time horizon. The introduction of preferred equity modifies the exposure level for various investor groups to Bitcoin price fluctuations, particularly for institutions that are looking for digital asset exposure with a different risk profile compared to common stock holdings.
Strategy’s choice to focus on perpetual preferred equity allows the company to reduce potential dilution for common shareholders while continuing to grow its Bitcoin reserves. However, this comes with the trade-off of higher fixed dividend obligations on these preferred shares, which have recently increased to 11.25%. This elevated rate adds to the company’s cash commitments at a time when it is reporting substantial net losses, including a staggering $12.4 billion loss in the fourth quarter of 2025.
While the cloud and software segment is still producing revenue, the dominant factor driving equity holders’ interest remains Bitcoin exposure rather than the fundamentals of the software business. When compared to other cryptocurrency-related companies such as Coinbase or Robinhood, Strategy stands out for its heavy concentration in Bitcoin—raising the stakes for its liquidity, funding, and risk management strategies.
As investors evaluate their positions, they should keep an eye on several key factors. First and foremost is the trajectory of Bitcoin prices, as Strategy’s earnings and stock performance are heavily influenced by market movements. Attention should also be paid to how the market receives the new Stretch issuances and the sustainability of the high dividend in an uncertain market. Finally, monitoring the core software business and its subscription and cloud revenue will be important to assess the company’s ability to meet cash needs if cryptocurrency conditions remain challenging.
Any shifts in management’s commitment to “never selling” Bitcoin or in the company’s capacity to access capital markets on favorable terms will also serve as critical signals for assessing risk. Investors looking to remain informed about developments impacting Strategy may benefit from connecting to relevant community discussions or adding the company to their watchlist.
