Understanding MicroStrategy’s Capital Structure

The Five Horsemen of Strategy Inc

• MSTR: Common Stock

  MSTR is Strategy’s common stock, representing equity ownership in the company. It’s the riskiest but potentially most rewarding security, offering leveraged exposure to Bitcoin’s price movements. Unlike preferred stocks, MSTR shareholders have voting rights but are last in line for payouts in a liquidation event. The stock’s value is tied to Strategy’s Bitcoin holdings (over 629,000 BTC as of August 2025) and its software business, though it trades at a premium to its Bitcoin assets. Investors in MSTR seek high growth, driven by Bitcoin’s performance, but face volatility and no guaranteed dividends.

• STRK: Convertible Preferred Stock

  STRK, or Series A Perpetual Strike Preferred Stock, offers an 8% annual dividend ($8 per share) based on a $100 liquidation preference, paid quarterly if declared by Strategy’s board. Its standout feature is convertibility: holders can exchange 10 STRK shares for one MSTR share if MSTR’s price hits $1,000, providing equity upside. STRK sits above MSTR but below other preferred stocks in the capital structure, balancing yield and growth. It raised $563 million in February 2025, appealing to investors seeking Bitcoin exposure with downside protection. As MSTR approaches $1,000, STRK’s price may rise due to its conversion option.

• STRF: Income-Focused Preferred Stock

  STRF, or Series A Perpetual Strife Preferred Stock, provides a 10% fixed dividend ($10 per share) on a $100 stated amount, paid quarterly starting June 2025, if declared. Unlike STRK, STRF lacks a conversion feature, making it a pure fixed-income security with greater price stability. It raised $711 million in March 2025, targeting income-focused investors like pension funds. STRF is senior to STRK and MSTR, offering lower volatility but no equity upside. If dividends are missed, they compound at 10% plus 1% annually, up to 18%.

• STRD: High-Yield, Higher-Risk Preferred Stock

  STRD, or Series A Stride Preferred Stock, launched in June 2025, offers a 10% non-cumulative dividend ($10 per share), the highest yield among Strategy’s preferred stocks. It raised nearly $1 billion, reflecting strong demand. STRD is junior to STRF and STRK in the capital structure, increasing risk but appealing to yield-seeking, risk-tolerant investors. Its non-cumulative dividends mean unpaid amounts don’t accrue, unlike STRF. STRD’s performance is tied to Strategy’s ability to sustain dividends, heavily reliant on Bitcoin market conditions.

• STRC: High-Yield, Stable Preferred Stock

  STRC, or Variable Rate Series A Perpetual Stretch Preferred Stock, was introduced in July 2025 via a $4.2 billion at-the-market (ATM) program. It offers a variable dividend rate, designed to compete with money market funds by providing high yield and price stability. STRC is non-callable under normal conditions but can be repurchased during tax events or fundamental changes. Its proceeds fund Bitcoin purchases and working capital, with some dividends supporting other preferred stocks. STRC targets investors seeking steady income with Bitcoin-backed exposure.