Strategy Preferred Stack

What it is

Strategy issued five series of perpetual preferred stock between February 2025 and November 2025, each engineered for a different combination of seniority, duration, rate mechanics, currency, and optionality. All five share the same fundamental architecture: perpetual, non-voting under normal conditions, dividends payable when, as and if declared by the board out of legally available funds, and no lien on the company’s bitcoin. Strategy states that the preferred securities “are not collateralized by the Company’s bitcoin holdings and only have a preferred claim on the residual assets of the company” (Strategy, STRC information).

The ranking within the stack, from senior to junior, is: all indebtedness and subsidiary liabilities, then STRF, then STRC, then STRE, then STRK, then STRD, then MSTR common equity (True North, STRE profile, consistent with the capital-stack diagrams in the STRF, STRC, STRK and STRD investor briefings).

STRF, 10.00% Series A Perpetual Strife Preferred Stock (Nasdaq: STRF). Initial issue date March 25, 2025 at $85.00 per share. Stated amount $100. Fixed 10.00% cumulative dividend, $10.00 per share per year, normally $2.50 quarterly on March 31, June 30, September 30 and December 31, cash only. No conversion. Senior-most of the current preferred series. Issuer may redeem all but not less than all following specified tax events or if less than 25% of issued STRF remains outstanding, at liquidation preference plus accumulated unpaid dividends. Holders have a fundamental-change repurchase right at the $100 stated amount plus accumulated unpaid dividends. Arrears compound per unpaid installment at an annualized rate beginning at 11% and rising 100 basis points per quarter to an 18% cap (STRF Investor Briefing; Strategy pricing press release, March 21, 2025).

STRC, Variable Rate Series A Perpetual Stretch Preferred Stock (Nasdaq: STRC). Initial issue date July 29, 2025 at an initial regular dividend rate of 9.00% per annum (424(b)(5) prospectus supplement). Stated amount $100, cumulative, paid semi-monthly in cash. The rate is reset monthly at the company’s sole discretion subject to contractual limits: a reduction may not exceed 25 basis points plus the decline in one-month term SOFR over the prior period, may not bring the rate below one-month term SOFR as of the day before notice, and may not be made while accumulated dividends for prior completed periods remain unpaid. The liquidation preference adjusts daily to the greatest of the $100 stated amount, the prior day’s last reported sale price when a sale transaction has occurred, and the ten-day trailing average sale price, with a $100 floor. Issuer redemption is at $101 or higher plus arrears, with a partial call required to leave $250 million outstanding, plus separate clean-up and tax-event redemption rights. Current stated rate is 12.00% (STRC Investor Briefing).

STRE, 10.00% Series A Perpetual Stream Preferred Stock (LuxSE Euro MTF: STRE, ISIN US5949728464). Priced November 6, 2025 at €80 per share on a €100 stated value, raising approximately €620 million on 7.75 million shares. Fixed €10.00 annual dividend per €100 stated amount, cumulative, paid quarterly in euros, no conversion, no reset. Arrears compound quarterly beginning at 11% and rising 100 basis points per period to an 18% cap. The only series in the stack denominated in euros and the only one listed outside Nasdaq; it settles through Euroclear and Clearstream, and the prospectus permits payment in U.S. dollars if euros are unavailable to the issuer (STRE Investor Briefing; True North, STRE profile; Strategy offering announcement, November 3, 2025).

STRK, 8.00% Series A Perpetual Strike Preferred Stock (Nasdaq: STRK). Initial issue date February 5, 2025 at $80.00 per share. Stated amount $100, fixed 8.00% cumulative dividend, $8.00 per share per year, normally $2.00 quarterly, payable in cash, MSTR shares, or a combination at Strategy’s election. Each share is convertible at the holder’s option into 0.1000 shares of MSTR class A common stock, subject to customary adjustment, which makes conversion value equal to 10% of the MSTR share price. Arrears compound quarterly at the 8.00% regular rate with no separate step-up. A covenant requires payment of the next dividend to the extent of net proceeds if Strategy sells MSTR for cash in a registered public offering during the 90 days before a record date. There is no general make-whole for lost option value, and an all-cash change of control can leave STRK convertible only into cash (STRK Investor Briefing; Strategy pricing press release, January 31, 2025).

STRD, 10.00% Series A Perpetual Stride Preferred Stock (Nasdaq: STRD). Initial issue date June 10, 2025 at $85.00 per share on 11,764,700 shares. Stated amount $100, fixed 10.00% dividend, cash only, quarterly, and critically non-cumulative: an omitted or undeclared dividend is not deferred, does not accrue interest, and is never owed in a future period. Junior-most of the preferred series, senior only to MSTR common. No conversion. No preferred-director rights on nonpayment. Issuer may redeem all but not less than all after specified tax events or if less than 25% of originally issued STRD remains, at the then-applicable liquidation preference plus declared and unpaid dividends; the liquidation preference floats daily to the greatest of $100 and specified recent market-price measures (STRD Investor Briefing; Strategy IPO pricing press release, June 6, 2025).

Sizes are not static: all five series have at-the-market issuance programs, including a registered ATM of up to $21 billion of STRC stock (424(b)(5) STRC annex, June 2026), and Strategy has repurchased STRC shares in the open market (STRC Investor Briefing).

How it is calculated

1. Aggregate stated notional of the stack

Worked example: (12,840,000 × $100) + (94,933,151 × $100) + (7,750,000 × €100 × 1.1604) + (14,020,000 × $100) + (14,020,000 × $100) = $22.59B. Strategy values non-U.S.-dollar preferred at prevailing exchange rates as of 12:30 PM New York time on the most recent Friday (Strategy, Notes and definitions).

2. Annual cash dividend obligation of the stack

Worked example: STRF at 10.00% contributes $128.4M; STRC at its current rate of 12.00% contributes $1.14B; STRE at 10.00% contributes €77.5M (~$89.9M USD); STRK at 8.00% contributes $112.2M; STRD at 10.00% contributes $140.2M. Total: $1.64B. Note that only STRF, STRC, STRE and STRK accrue if unpaid; the STRD component is a discretionary obligation that vanishes if omitted.

3. Current yield by series

Worked example, STRK: $100 × 8.00% = $8.00 of annual dividend; $8.00 ÷ $73.40 = 10.90%. Worked example, STRD: $10.00 ÷ $72.67 = 13.76%. Worked example, STRC: (12.00% × $100) ÷ $97.52 = 12.31%.

4. STRK conversion value and premium

Worked example: 0.1000 × $129.60 = $12.96; ($73.40 − $12.96) ÷ $12.96 = +466.38%. The conversion feature becomes the dominant value driver only when MSTR trades high enough that 0.1000 shares exceed the value of STRK’s perpetual income stream.

5. STRF arrears accrual

Each unpaid quarterly installment of $2.50 compounds independently under the ladder 11%, 12%, 13%, 14%, 15%, 16%, 17%, 18%, capped thereafter. Held through eight full quarterly compounding periods, one $2.50 installment grows to approximately $3.32 under the filed 30/360 convention (STRF Investor Briefing). Payments are applied to the oldest unpaid period first.

6. Treasury coverage of the stack

Worked example: (845,050 × $75,868 + $6.40B) ÷ $1.64B = 42.9 years, assuming asset sales at prevailing prices and no new issuance.

Why it matters

Before yield, the risk axes. Dividend discretion: every series pays only on board declaration from legally available funds, with STRK’s registered-offering covenant the narrow exception. Cumulative accrual: STRF, STRC, STRE and STRK accumulate unpaid dividends, with penalty compounding on STRF and STRE up to 18% and semi-monthly compounding at the applicable rate on STRC; STRD accumulates nothing. Perpetuity: no series matures, so capital return depends on secondary-market sale, issuer redemption, or a fundamental-change repurchase. Subordination: all five sit behind convertible notes and subsidiary liabilities, and behind each other in the stated order. Redemption asymmetry: STRF and STRD are callable in full only on tax events or a 25% clean-up trigger, while STRC carries a broader call at $101 or higher plus arrears, which caps upside for holders who paid a premium. Issuer credit: the dollar obligations of the stack are met from reserves, income, issuance, or bitcoin sales, and Strategy has used each channel. Liquidity: notional sizes differ by roughly an order of magnitude across the series, which affects execution and price behavior. Premium and discount: most contractual exits reference the $100 stated amount or the liquidation preference, so buying materially above par means the protective features do not protect the full purchase price.

With those framed, the design logic of the stack becomes legible. It is a yield curve constructed across a single credit. STRF sells seniority and cumulative penalty accrual at a fixed 10.00%. STRC sells price stability, buying it with issuer rate discretion, a daily-adjusting liquidation preference, and semi-monthly cash flow, and is by far the largest series by notional. STRE sells euro-denominated fixed income to a non-U.S. investor base and a non-Nasdaq listing venue. STRK sells a lower 8.00% stated rate in exchange for a call option on MSTR at a 0.1000 conversion rate. STRD sells the highest structural risk, non-cumulative and junior-most, at a 10.00% stated rate that in practice trades at a substantially higher current yield.

For an investor, this means the five tickers are not five prices for the same risk. Two series can carry identical 10.00% stated rates and represent quite different claims: STRF is senior-most with penalty accrual to 18%, and STRD is junior-most with no accrual at all. Any comparison across the stack that stops at the stated rate is comparing labels, not securities. The relevant comparison set is current yield adjusted for cumulation, seniority, call structure, currency, and the daily behavior of the liquidation preference.

For the issuer, the stack is a financing instrument whose cost is partly discretionary. STRC’s monthly rate reset lets Strategy pay more to defend the $100 trading anchor when the market demands it and pay less when it does not, within contractual limits that prevent abrupt cuts. That flexibility transfers rate risk to holders and price stability to them at the same time, which is the central trade to understand in the series. The obligations are real regardless: Strategy sold 3,588 bitcoin in mid-2026 explicitly to fund digital credit dividends and replenish reserves (Strategy press release, July 6, 2026), and separately established a USD Cash pool alongside the existing USD Reserve designated to support preferred dividends and interest (StockTitan summary of Strategy Form 8-K).

Key distinctions

• STRF and STRD share a 10.00% stated rate but are not comparable claims. STRF is the senior-most series with cumulative dividends compounding from 11% to an 18% cap; STRD is junior-most and non-cumulative, so an omitted dividend is permanently lost (STRF; STRD investor briefings).
• STRC’s variable rate is issuer-set, not index-linked. Strategy chooses the monthly rate in its sole and absolute discretion within limits: a cut of no more than 25 basis points plus the SOFR decline, no rate below one-month term SOFR, and no cut while arrears are outstanding (424(b)(5) prospectus supplement).
• The $100 stated amount is not a redemption promise. It is the base for dividend calculation and the reference for fundamental-change repurchase; the only scheduled path to $100 is a corporate event, not the passage of time.
• Liquidation preference is not always $100. For STRC and STRD it adjusts daily to the greatest of the stated amount and specified recent market-price measures, with a $100 floor, so it can exceed par when the market price does (STRC prospectus supplement).
• None of the series is secured by bitcoin. All hold a preferred claim on residual assets only, with no lien on the company’s holdings (Strategy).
• STRE is the only euro-denominated and only non-Nasdaq series. It trades on the Luxembourg Stock Exchange’s Euro MTF market and settles through Euroclear and Clearstream, which changes access, settlement and currency exposure for a dollar-based holder (True North, STRE profile).
• STRK’s convertibility is not a make-whole. There is no general make-whole for lost option value, and an all-cash change of control can convert the instrument’s upside into cash consideration (STRK Investor Briefing).
• The stack is not fixed in size. Each series has an at-the-market program, including a registered ATM for up to $21 billion of STRC, and Strategy has also repurchased STRC in the open market, so notional and per-series weight change continuously (424(b)(5) STRC annex).
• Preferred notional feeds Strategy’s mNAV. The aggregate notional of the stack is deducted in the calculation of Net BTC and therefore affects the reported mNAV multiple, which is one reason the notional-versus-market valuation debate matters (Strategy, Notes and definitions).

Related terms

• Digital Credit
• mNAV
• Bitcoin Treasury Company
• STRC “Stretch” profile
• STRK “Strike” profile
• STRF “Strife” profile
• STRD “Stride” profile
• STRE “Stream” profile
• STRC ATM Tracker
• Digital Credit Dashboard

Sources

1. Prospectus Supplement, Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), Form 424(b)(5) — MicroStrategy Incorporated d/b/a Strategy, via SEC EDGAR.
2. Prospectus Supplement, Series A Perpetual Stretch Preferred Stock Annex, up to $21,000,000,000, Form 424(b)(5) — Strategy Inc, via SEC EDGAR.
3. Prospectus Supplement, 8.00% Series A Perpetual Strike Preferred Stock (STRK), Form 424(b)(5) — MicroStrategy Incorporated d/b/a Strategy, via SEC EDGAR.
4. Prospectus Supplement, 10.00% Series A Perpetual Stride Preferred Stock (STRD), Form 424(b)(5) — MicroStrategy Incorporated d/b/a Strategy, via SEC EDGAR.
5. STRF Investor Briefing — Strategy Inc.
6. STRC Investor Briefing, revised August 13, 2026 — Strategy Inc.
7. STRK Investor Briefing — Strategy Inc.
8. STRD Investor Briefing — Strategy Inc.
9. STRE Investor Briefing — Strategy Inc.
10. STRC Information and STRK Information — Strategy Inc.
11. Strategy Announces Pricing of STRF Perpetual Preferred Stock Offering — Strategy Inc., March 21, 2025.
12. MicroStrategy Announces Pricing of Strike Preferred Stock Offering (STRK) — Strategy Inc., January 31, 2025.
13. Strategy Announces Pricing of Initial Public Offering of STRD Stock — Strategy Inc., June 6, 2025.
14. Strategy Announces Proposed STRE Perpetual Preferred Stock Offering — Strategy Inc., November 3, 2025.
15. Notes and Definitions — Strategy Inc.
16. STRE: Strategy’s Euro-Denominated Preferred — True North Research.
17. Strategy Sells 3,588 BTC to Fund Digital Credit Dividends — Strategy Inc., Form 8-K press release, July 6, 2026.
18. Strategy establishes USD Cash pool under Digital Credit Capital Framework, Form 8-K — Strategy Inc., via StockTitan.