The preferred stock Strife (STRF) by Strategy will start trading on Nasdaq, announced the executive chairman of the company Michael Saylor. The preferred stock will offer USD or BTC yield for STRF and MSTR investors.
Michael Saylor announced the beginning of trading for Strife yield-bearing preferred shares. The STRF stock will start trading on Nasdaq as of March 26. Saylor announced the launch of the new market through X.
Our new preferred stock STRF (“Strife”) creates USD Yield for $STRF investors—and BTC Yield for $MSTR investors. It begins trading today on Nasdaq.
The announcement arrives just days after Strategy once again added new BTC to its treasury, now holding over half a million coins. STRF is the latest addition to the company’s portfolio, with a new issuance of 500K shares in March.
After Strategy’s recent exposure, MSTR shares once again entered their role as a proxy for BTC performance. The stocks traded at a one-month high of $341.81, in expectation of the STRF price discovery stage.
STRF was recently announced to trade at $85 per share, suggesting a yield of 11.6% annualized. The outsized yield may be enticing enough for Strategy to buy more BTC and possibly boost the market price to a higher range.
STRF to work as a bond
The new preferred STRF stock aims to work as a bond with a high yield, aiming to redirect as much funds as possible into BTC. The asset works as a debt instrument, with dividends instead of yield. The launch of Strife is part of Strategy’s drive to maximize BTC purchases at any price.
Strife issuance will be perpetual until Strategy decides to discontinue the stock. Strategy reserves the right to retire STRF at a face value of $100 or pay out the predetermined dividend. STRF aims at a chance of tapping investors seeking a fixed income, including large-scale institutions, who see MSTR as too volatile.
Strategy aims to cover the significant promised dividend with its inflows from other software activities, while retaining BTC as the final warranty.
STRF will have a $100 face value, which will give the minimal claim in the case of a liquidation. STRF is not convertible, unlike STRK, which can be converted to common stock. Just like STRK, the new preferred shares do not carry voting rights.
So far, Strategy has issued general debt, STRK Perpetual Strike Series A, MSTR common stock, and the preferred Series A shares, STRF. In the case of a liquidation, the company will prioritize debt, then STRF, STRK, and MSTR holders.
The Strategy asset issuance and purchases, are in effect trying to tap investors in the bond market and put more funds into BTC. Saylor has also come out as a true believer, stating the BTC treasury accrued may be burned and never sold.
Strategy remains the single biggest holder of BTC with a dedicated long-term outlook. For now, the company’s wallets are not publicly announced. However, Arkham has identified an entity that is most probably Strategy. Based on the company’s own reports, Strategy now holds 506,137 BTC. Some of the BTC may also be held with Fidelity Custody. Strategy holds all its BTC passively, with no announcements of using the coins for yield or other operations.
The recent new stock issuances and the previous issuance of STRK at 8% yield is sparking worries about the company’s ability to service the debt. The STRK convertible shares aim at raising as much as $21B over the years, depending on market conditions.
The issuance of STRF required an even higher promised yield with uncertain demand for raising funds. Strategy’s approach also relies on traders mostly deciding to keep their money in the company’s ecosystem, as a proxy for BTC performance.
BTC also reacts to Strategy’s activity, especially when there are periods of new buying. After the recent purchase, BTC recovered to $87,785.38.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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