Strategy (MSTR), the bitcoin-focused corporate entity formerly known as MicroStrategy, launched its Perpetual Stretch Preferred Stock (STRC) late last month — an offering Executive Chairman Michael Saylor has described as the company’s “iPhone moment.” The STRC preferred stock has already raised $2.5 billion, and a newly opened $4.2 billion at-the-market (ATM) program could extend its scale even further — offering high-yield dividends backed by bitcoin and designed to appeal to yield-seeking investors. What is STRC, and how does it work? STRC (marketed as “Stretch”) is a variable-rate, perpetual preferred stock designed to deliver stable pricing, strong yield, and easy access for income-focused investors seeking indirect bitcoin exposure. The shares pay a monthly dividend—initially set at 9% annualized—based on a $100 par value. Strategy may adjust that dividend monthly, within rules meant to keep STRC trading close to its $100 target price. Each share of STRC is overcollateralized with bitcoin at a ratio of roughly 5-to-1, meaning that for every dollar of STRC issued, Strategy holds approximately five dollars’ worth of BTC. The security sits senior to other preferred stocks like STRD, STRK, and the firm’s common equity, but remains junior to debt and the STRF preferred series. Dividends are cumulative and compound if unpaid. Importantly, if any month’s payment is missed, a dividend “stopper” activates — preventing payouts to junior securities until STRC is made whole. The stock can be redeemed at the issuer’s option once listed on Nasdaq (which it now is), and it includes a fundamental change put right at liquidation value plus any accrued dividends. The security is engineered to function like a high-yield savings instrument with bitcoin backing — without the volatility of direct crypto holdings or the duration risk of traditional preferreds. Strategy raises $2.5 billion in STRC IPO The company’s IPO of STRC raised approximately $2.5 billion through the issuance of 28 million shares priced at $90 each. The offering was announced on July 21 and closed on July 29. Proceeds will be used for general corporate purposes, including further bitcoin purchases and working capital. The board of directors declared an initial monthly dividend of $0.80 per share, with payment scheduled for Aug. 31, 2025, to shareholders of record as of August 15. Saylor described STRC as a clean, scalable instrument that solves the constraints of previous capital tools like convertible bonds and complex long-duration preferred shares. The product was designed to appeal not only to institutional allocators but also to yield-seeking retail investors. Inside the $4.2 billion ATM program On July 31, Strategy announced a new sales agreement allowing the company to issue up to $4.2 billion worth of STRC shares through an at-the-market (ATM) offering. This gives Strategy the ability to tap liquidity gradually, adjusting issuance based on market conditions and pricing. Internal guidance suggests that Strategy intends to keep issuance within a narrow band — avoiding sales below $99 or above $101 (before fees), consistent with its target of maintaining a stable $100 trading price. The firm explicitly stated it does not plan to apply this discipline to its other preferred equity programs, reinforcing STRC’s unique positioning. The ATM program allows Strategy to meet capital needs flexibly, support its dividend policy, and scale BTC acquisitions further while preserving shareholder alignment. Why Saylor calls STRC his ‘iPhone moment’ Michael Saylor sees STRC not just as another capital-raising tool — but as a turning point in corporate finance. During Strategy’s Q2 2025 earnings call on July 31, he called the product his firm’s “iPhone moment,” comparing its potential to the kind of consumer breakthrough that redefined an entire industry. At the heart of Saylor’s vision is STRC’s accessibility. Unlike Strategy’s earlier instruments — such as STRK, STRF, and STRD — which he praised as innovative but too complex or volatile for mass adoption, STRC is designed to function more like a yield-enhanced savings account. “If I walk down the street and you ask a hundred people, ‘Do you want a high-yield bank account?’ 99 out of 100 say yes,” he said, underscoring the simplicity of the pitch. He believes STRC solves two core problems: it strips away long-term volatility by targeting short duration and low price fluctuation, and it offers a consistent premium over typical bank yields. “We’ve stripped down to a one-month duration and it pays 500 basis points above your bank account,” he said, describing the instrument’s 9% variable monthly dividend. Importantly, STRC is engineered to trade near par ($100), giving investors peace of mind — especially those sensitive to price swings. Saylor emphasized that previous products lost retail traction when their principal value fluctuated by 5–10%. In contrast, STRC’s goal is to hold close to par even as bitcoin prices move, thanks to its heavy overcollateralization with BTC. “If Stretch actually hits its par and it trades with low volatility, then you could, in theory, sell a hundred billion dollars of it, two hundred billion dollars of it,” he told analysts. That, he argued, would enable Strategy to massively scale its bitcoin holdings without selling any BTC — effectively using its treasury as collateral to monetize liquidity at retail scale. In Saylor’s view, this combination — simplicity, stability, and yield — is what makes STRC transformational. Just as the iPhone reimagined how users interacted with mobile computing, STRC could redefine how companies tap capital markets in a bitcoin-native way.
