- Strategy (MSTR) introduced the Series A Stride Preferred Stock (STRD), a perpetual preferred equity instrument.
- STRD offers a 10% non-cumulative fixed dividend and does not have a maturity date.
- The new STRD sits in the firm’s capital structure below the senior preferred (STRF) offering and above the convertible preferred (STRK).
- STRD cannot be called under normal market conditions but can be repurchased if certain major events occur.
- STRD aims to provide higher yields with no management fees, standing out against comparable high-yield ETFs and bond funds.
Strategy (MSTR) launched its third perpetual preferred equity product, Series A Stride Preferred Stock (STRD), as part of its efforts to expand a structured yield curve in its capital stack. STRD is designed to provide long-term, high-yield investment options, with a fixed dividend rate of 10% and no set maturity.
According to Strategy, the STRD instrument has a junior claim compared to its senior preferred (STRF) product, which is more conservative and overcollateralized, but offers a higher fixed dividend. STRD’s quarterly dividend is non-cumulative, meaning unpaid dividends do not accumulate, and payments are only made when declared by the board and paid in cash.
The new offering is perpetual and cannot be called (bought back) in ordinary circumstances, though Strategy states that repurchase may happen following a fundamental change or certain tax events. STRD sits below STRF in the company’s capital stack but above the convertible preferred (STRK) instrument, which features an 8% fixed dividend and a conversion feature for shares.
At the base of the stack is the firm’s common stock, MSTR, which offers leveraged Bitcoin exposure to investors. “With a 10% yield and zero management fees, STRD offers a compelling alternative to ETFs such as PFF or USHY, while maintaining comparable volatility,” the company said.
In broader markets, STRD competes against other preferred equity and high-yield bond products, such as the PFF ETF (with a 7% yield and a 0.46% fee) and the USHY ETF (8% yield, 0.08% fee). STRD aims to offer a higher yield with no management fees, targeting investors looking for structured yield within digital asset-focused capital structures.
The instrument helps Strategy further its aim of offering a range of yield and asset exposure, from stable income to higher-risk digital asset investments, supporting a new approach to capital structuring in the digital asset sector.
For more details, see the official announcement from Strategy (MSTR).
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