Strategy, the digital asset-focused firm led by Michael Saylor and known as the largest corporate holder of Bitcoin, is launching a new financial product designed to raise $500 million for further BTC accumulation.
The company announced plans to conduct an initial public offering of a new class of preferred stock called the Variable Rate Series A Perpetual Stretch Preferred Stock, or STRC.
Strategy Unveils $500M Preferred Stock Offering to Boost Bitcoin Holdings
According to the filing with the US SEC, Strategy plans to sell 5 million shares of its STRC preferred stock at $100 each. Proceeds will be directed toward general corporate purposes, with additional Bitcoin purchases explicitly mentioned as a priority.
Unlike previous convertible debt issuances, this offering gives yield-seeking investors a new entry point without diluting common shareholders. The STRC shares will offer a 9% annual dividend, paid monthly starting August 31, 2025.
The company retains flexibility to adjust the rate based on market shifts and the one-month SOFR benchmark, though caps are in place to prevent abrupt reductions. Importantly, any missed dividends will accrue and compound until paid.
To maintain price stability, Strategy says it will aim to keep STRC shares trading close to their $100 par value by dynamically managing dividend payouts.
Shareholders are protected with structured exit options. If a “fundamental change” occurs, such as a merger or restructuring, holders can demand a buyback at $100 plus accrued dividends.
Other redemption triggers include a tax event or if the number of outstanding shares falls below 25% of the original issuance.
A listing date has yet to be announced. Strategy emphasized that issuance timing will depend on market conditions and that dividends are not guaranteed; they will only be distributed when legally permissible and at the discretion of the board.
Strategy’s $STRC Preferred Stock Draws Praise and Pyramid Scheme Warnings Across Crypto Community
Following its July 14 announcement of acquiring 4,225 additional BTC, Strategy has doubled down on its aggressive Bitcoin strategy with a new financial product that’s drawing both intrigue and concern across the crypto and traditional finance worlds.
According to Bitcoin author Adam Livingston, the newly launched $STRC is neither traditional equity nor debt.
Instead, he describes it as a “new financial lifeform” engineered to rapidly convert fiat into Bitcoin while paying a variable monthly dividend starting at 9% annually. Strategy retains the ability to adjust the rate each month to keep the share price hovering near $100.
“You’re not buying stock,” Livingston wrote Monday on X. “You’re buying a yield-targeted Bitcoin conduit.”
The product gives Strategy a mechanism to absorb capital and dollar-cost average into Bitcoin while preserving the option to redeem preferred shares once BTC appreciates. Enthusiasts see this as a novel tool to align Bitcoin exposure with flexible income streams.
But not everyone is convinced. Critics argue that STRC’s structure closely resembles a pyramid-like system, relying on continuous inflows of new capital to sustain high dividend payouts. Veteran crypto analyst Germ Crypto dismissed the innovation narrative, warning,
“Actually, what it’s building is a ton of future liabilities for the common shareholder to absorb, especially during a bear market. I wouldn’t own MSTR common stock if you gave it to me.”
Skeptics point out that STRC isn’t backed by any hard maturity, doesn’t grant equity upside, and lacks the legal protections of debt. The variable dividend, while attractive, could quickly become a liability if Bitcoin’s price falters. This creates what some view as hidden leverage, with returns appearing stable on the surface but underpinned by escalating obligations if market sentiment shifts.
Longtime Bitcoin critic Peter Schiff went further, calling the product a “financial house of cards,” comparing it to a modernized pyramid scheme.
Such criticism draws on fears that the product pays returns not from generated yield, but from the proceeds of new investors, a structure that, while legal under current SEC rules, raises ethical and financial red flags.
Strategy’s Bitcoin reserves now total 601,550 BTC, acquired at an average price of $71,268, amounting to a staggering $42.87 billion in total outlay. In 2025 alone, Strategy’s Bitcoin-related yield has reportedly reached 20.2%.
To finance its aggressive expansion, the company sold nearly 2 million shares of common and preferred stock between July 7 and July 13, raising $472.3 million in net proceeds. The majority, $330.9 million, came from common stock, with additional capital raised via preferred instruments STRK, STRF, and STRD, offering annual dividends between 8% and 10%.
The post Michael Saylor’s Strategy Rolls Out $100 Bitcoin ‘Stretch’ Preferred Stock With 9% Yield appeared first on Cryptonews.
