K33: Strategy's Preferred Stock Financing May Cost It Bitcoin
MSTR sits 82% above its 52-week low of $81.81.
Summary
K33 Research argues Strategy's preferred stock financing was a mistake, calculating the company would have held 843,303 BTC on Oct. 12 if it had avoided STRC issuance and instead used the $7.5B raised, $4B dollar reserve, and $1.6B in buybacks to buy bitcoin directly. The firm puts annual preferred dividend obligations at $1.56B, up from $830M, equivalent to 8,740 BTC at $83,000 per coin. That dividend drag would erase the 4,947 BTC gap between actual and hypothetical holdings in about seven months. Strategy's dollar reserve covers roughly 42 months of dividends, reducing forced bitcoin sales, but K33 argues common stock issuance would be more efficient than paying a 12% coupon on STRC. The report follows Strategy's Q3 estimate of a $20.91B digital asset gain, a sharp reversal from Q2's $8.2B loss.
At the time of this announcement, MSTR was trading at $149.21 on NASDAQ in the Crypto Assets sector, with a market capitalization of approximately $64.2B. The 52-week trading range was $81.81 to $315.95. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: The Block.