MicroStrategy Launches New Preferred Stock STRD, Market Reaction Mixed

MicroStrategy recently launched a new preferred stock product STRD, which is another financing measure the company has taken to further increase its Bitcoin position. In recent years, the company has continuously raised funds through various means such as common stock, convertible bonds, and preferred stock to support its Bitcoin-heavy strategy.

STRD is the third preferred stock product from MicroStrategy, with plans to issue 2.5 million shares. This product's design continues the framework of the previous two preferred stocks but has made new adjustments in terms of income distribution and exit mechanisms. STRD offers a 10% annual coupon, but the company has no obligation to make mandatory payments, and interest does not accumulate.

This structural design has been described by some market analysts as a "defensive yet aggressive" strategy. MicroStrategy commits to timely interest payments when the company's profitability is good, but retains the option not to pay. Theoretically, the company can pay these interests by selling Bitcoin, securing continued financing, or using operating cash flow.

At the same time, the launch of STRD has also sparked some controversy. Some community members have criticized it as a "capital magic" or a "Ponzi scheme." Analysts have pointed out that STRD is actually a Bitcoin accumulation option disguised as a yield tool. When the price of Bitcoin rises significantly, MicroStrategy may redeem at face value; while in the case of a sharp price drop, the company may choose not to pay interest.

From the perspective of capital structure, the issuance of STRD may improve the credit support of the company's other preferred stock products and optimize the overall capital structure. There is a view that this approach may enhance the credit quality of another preferred stock, STRF.

Regarding the future development of MicroStrategy, some industry insiders speculate that the company may consider using its held Bitcoin for lending or participating in quantitative trading to maintain cash flow, and it may even transform into a Bitcoin-based bank.

MicroStrategy's series of measures is essentially packaging its belief in Bitcoin through structured products, using risk-return models to conceal its unilateral betting strategy. This faith-based financial experiment is becoming increasingly complex and worthy of market attention. As the company continues to introduce new financing tools, the sustainability and long-term impact of its heavy Bitcoin investment strategy will continue to spark discussions.