MicroStrategy, sorry, Strategy now, because apparently dropping "Micro" from your name makes you sound less like a mid-2000s enterprise software company and more like a visionary Bitcoin holding corporation that has done something genuinely impressive. They've convinced Wall Street to lend them money, then convinced Wall Street to lend them more money in a different format, then done it again, and again, until they had four distinct flavors of preferred stock trading on public markets. All backed by the same pile of Bitcoin and the unshakeable confidence of a man who looked at 641,000 BTC and said, "Yeah, but what if we bought more?"p

Welcome to the preferred stock buffet. The food is excellent. The kitchen might be on fire. Let's eat.

Strategy raised $21 billion across seven securities offerings in 2025 alone. Let that land for a second. Twenty-one billion dollars. In one year. Not from selling software. Not from licensing intellectual property. From convincing investors that a company whose entire thesis is "numbers go up" should be trusted with their retirement income.

The result is four preferred stock series: STRC, STRF, STRD, and STRK, each offering a different combination of yield, risk, and existential dread. They range from 7.33% effective yield on the "safe" end to 14% on the "the market is trying to tell you something" end. Together, they represent one of the most creative capital structures in modern finance, and possibly one of the most fragile.

Here's what makes this interesting: all four series feature non-cumulative dividends. That's the polite, prospectus-approved way of saying that if Strategy misses a payment, that money is gone. Not deferred. Not accrued. Gone. Poof. Like it never existed. Like your confidence in the board's fiduciary duty.

Traditional cumulative preferreds work like an IOU; skip a payment, and the company owes it back with interest before common shareholders see a dime. Strategy's preferreds work more like a promise made at 2 AM after three whiskeys. Sincere? Probably. Legally binding? The prospectus would like a word.

Let's walk through each series, because if we're going to ride this particular rollercoaster, we should at least know which car we're sitting in.

STRC is the only one of the four that pays monthly, which makes it catnip for income investors who check their brokerage accounts the way some people check Instagram. The current rate sits at 11.25% annually, variable and adjusted monthly to keep the price hugging par value like a nervous prom date.

The variable-rate mechanism is clever in theory: when the price falls below $100, the rate rises to attract buyers. When it drifts above, the rate ticks down. It's basically a thermostat for stock prices, and it works about as reliably as the one in your office most of the time. It's fine, but sometimes you're sweating through your shirt at your desk, wondering who touched the controls.

STRC shows a 30-day average trading volume of $13.4 million with 35% historical volatility. That's respectable for a preferred, but in a real liquidity crunch, you're not slipping out the back door quietly. You're climbing out of the bathroom window, hoping no one notices.

STRF is the senior-most preferred in Strategy's capital structure, which in this context is like being the tallest person in a limbo contest. Congratulations, you'll be the last one to hit the bar, but you're still going under it. It pays a fixed 10% nominal dividend quarterly and currently trades at $105.07, pushing the effective yield down to about 7.33%.

That premium to par is the market's way of saying, "We believe this one will probably keep paying." Probably. The word doing a lot of heavy lifting in that sentence. Because even as the senior preferred, STRF sits below $8.2 billion in convertible debt. That's not a speed bump in front of you, that's a concrete wall with "$8.2 BILLION" spray-painted on it.

Still, if you absolutely must own Strategy preferred stock and you want the one least likely to give you heartburn at 3 AM, STRF is your pick. It's the seatbelt in a car that might be going 140 miles per hour. It won't prevent the crash, but it'll improve your odds of walking away from one.

Here's where things get spicy. STRD offers the same 10% nominal dividend as STRF, paid quarterly on March 31, June 30, September 30, and December 31 $2.50 per share, reliable as a calendar. But because it's currently trading at roughly $85.75 against a $100 par value, the effective yield has ballooned to approximately 14%.

Now, 14% yield on any security should trigger the same instinct as a stranger offering you a Rolex in an alley. Something is either very wrong or very right, and the market hasn't decided yet. STRD's discount to par implies a required return of about 11.8% ($10 ÷ $85 = 11.8%), indicating the market sees meaningful credit risk that STRF's premium pricing doesn't reflect.

The opportunity, if you're the type who runs toward sirens, is obvious: if credit concerns ease and STRD migrates back toward par, you pocket both the 14% yield and capital appreciation. That's the dream. The nightmare is that the discount to par reflects the market correctly pricing in a future in which Bitcoin returns to $40,000 and those quarterly checks stop arriving. At $40,000 Bitcoin, Strategy's loan-to-value ratio hits 30%, and total obligations, including preferreds, reach 52% of asset value. The math gets uncomfortable fast.

STRK is the wild card. It pays a fixed 8% annual dividend, the lowest nominal rate in the family, but it comes with a party trick: convertibility into MSTR common stock at a ratio of 0.1 shares per preferred share.

For that conversion to actually make money, MSTR common needs to trade above $900. It's currently sitting around $327, which means we need approximately 175% appreciation to reach breakeven. In normal markets, that's delusional. In Bitcoin markets, that's a Wednesday.

The conversion feature makes STRK behave less like a preferred stock and more like a call option that pays you 9.85% effective yield while you wait. When Bitcoin rips, STRK rips with it, moving in near-lockstep with MSTR common. When Bitcoin dumps, STRK dumps too, because the market remembers it's still a preferred stock subordinate to $8.2 billion in debt issued by a company whose business model is "we own a lot of Bitcoin."

STRK exhibits the highest volatility among all four series, which is saying something for a group of securities linked to a company that holds 3% of the world's Bitcoin supply. For growth-oriented income investors, that volatility is a feature. For everyone else, it's a reason to look at literally anything else on this page.

This is the series for people who want income and upside, which is like wanting a dog that's also a cat, theoretically possible, practically chaotic, and you're definitely cleaning something off the floor either way.

Let's talk about the thing that makes all of this either brilliant or insane, depending on which direction a line on a chart goes next week.

Strategy holds approximately 641,000 to 672,000 BTC as of late 2025. That's roughly 3% of Bitcoin's total supply, locked in the treasury of what used to be a business intelligence software company. The aggregate cost basis is around $74,000 per coin, which means at current prices, the company maintains about 5.9x debt coverage. That's comfortable. Even in a severe downturn to $25,000 Bitcoin, the kind of drawdown that makes grown traders cry in parking lots, coverage stays at 2.0x.

But here's what the bull case conveniently omits: the company generates essentially zero traditional operating cash flow. The legacy software business exists, technically, the way a vestigial tail exists; it's there, it's attached, nobody talks about it at parties. Dividends on these preferreds are paid through one of three mechanisms, none of which involve selling software licenses.

First option: Bitcoin appreciates, and Strategy sells some to fund payments. This works great until it doesn't, and selling BTC into weakness is the financial equivalent of eating your seed corn.

Second option: the company issues more equity or debt to raise cash. This dilutes existing shareholders and adds more obligations to a capital structure already groaning under $8.2 billion in convertible notes. It's the financial version of taking out a credit card to pay your mortgage.

Third option: liquidity management from existing holdings. This is the corporate finance equivalent of checking between the couch cushions.

The perpetual nature of these securities means there's no maturity date, no light at the end of the tunnel where you get your $100 par back and move on with your life. You're married to this capital structure until you sell, the company calls it, or the heat death of the universe. Whichever comes first.

The fundamental valuation formula for a perpetual preferred is elegant in its simplicity and terrifying in its implications:

Intrinsic Value = Annual Dividend ÷ Required Rate of Return

For STRF, with its $10 annual dividend, the math works like this: if the market demands a 10% return, the fair value is $100. If sentiment improves and the required return drops to 9%, fair value jumps to $111. If things deteriorate and the market wants 12%, the fair value drops to $83.

STRD at $85 with its $10 dividend tells us the market currently demands roughly 11.8% to hold it. That's a significant premium over bank preferreds, which yield 6-7%, and it reflects exactly what you'd expect from a crypto-linked security with non-cumulative dividends and a management team that treats Bitcoin like a religion.

Interest rate sensitivity is the other variable that'll keep you up at night. Fixed-rate preferreds move inversely with rates when the Fed hikes; your principal value drops, because investors can get comparable yields elsewhere without the existential risk of betting on a single asset. STRC's monthly variable-rate resets provide partial insulation here, which is a genuine advantage if rates spike. The other three just take it on the chin.

Before we get too deep into the Strategy universe, it's worth remembering that yield exists outside the blast radius of Bitcoin volatility.

Bank of America preferreds (BAC-P, BAC-Q) offer yields of 6.1-6.2% with 44-48% upside to par. These come with something Strategy can't offer: a diversified business model, regulatory capital requirements, and a track record that doesn't involve converting a software company into a cryptocurrency holding vehicle. The yield is lower, but the pillow is softer.

VanEck's Preferred Securities ex Financials ETF (PFXF) yields 6.9% by spreading risk across utilities, REITs, and industrials. It's the preferred stock equivalent of eating your vegetables: boring, nutritious, and nobody's writing breathless Twitter threads about it.

Outside preferreds entirely, Enterprise Products Partners (EPD) yields 6.4% with 27 consecutive years of distribution increases. Realty Income (O) pays monthly at 5.3% and has raised its distribution for 113 consecutive quarters. These companies pay you because they generate actual cash flow from actual businesses. Pipelines. Properties. Things you can touch. Revolutionary concept.

For the MLP-curious, MPLX yields 7.7% backed by Marathon Petroleum's refining operations. Oil and gas may not be sexy, but they have a charming habit of generating cash whether or not Elon Musk tweets something inflammatory.

The yield gap tells the whole story: Strategy's preferreds pay 8-14% while traditional alternatives cluster around 5-7%. That 300-700 basis-point spread is the market's way of quantifying what it means to have your income stream tethered to the price of a digital asset that once dropped 80% in 18 months. You're getting paid to take that risk. The question is whether you're getting paid enough. And if your answer involves the phrase "well, Bitcoin always comes back eventually," congratulations, you've just identified the assumption that makes or breaks every position in this capital structure.

If you need monthly cash and can stomach rate changes, STRC gives you twelve checks a year at 11.25% variable. It's the only monthly payer in the lineup. Just understand that "variable" means it can go down, and "non-cumulative" means if they skip a month, that check isn't coming.

If you want relative safety within an inherently unsafe structure, STRF sits at the top of the preferred stack, trading above par, with the market's implicit vote of confidence baked into the price. You're sacrificing yield (7.33% effective) for seniority. Whether that seniority matters in a true crisis is an exercise left to the investor's imagination.

If you see value in distressed pricing and can tolerate the risk, STRD at $85 with a 14% effective yield is either a screaming buy or a screaming warning. If you believe Bitcoin holds above the Strategy's cost basis and dividends keep flowing, you get the highest yield in the family, plus potential capital appreciation back to par. If you're wrong, you own a perpetual security trading at a discount for very good reasons.

If you want income plus a lottery ticket: STRK pays you 9.85% while you wait for MSTR to triple. The conversion feature is optionality in its purest form, worthless until it's everything. At $327 common, you need a 175% move to break even on conversion. In Bitcoin terms, that's ambitious but not insane.

If you want to sleep at night: Bank preferreds. REITs. MLPs. Things backed by buildings and pipelines, and the boring, beautiful certainty of cash flow from operations. You'll earn less, but your blood pressure will thank you.

One potential silver lining: preferred stock dividends may qualify for qualified dividend treatment at favorable capital gains rates, provided you meet the holding period requirements. That's a meaningful tax advantage over bond interest, which gets taxed at ordinary income rates, the rate your paycheck gets taxed at, the rate that makes April 15th feel personal.

However, and this is the kind of "however" that requires a professional Strategy's specific tax treatment of a professional strategy depends on prospectus details that vary by series. Some distributions could qualify for return-of-capital treatment, which defers tax by reducing your cost basis. That's tax-efficient until you sell, at which point the piper demands payment. Consult an actual tax advisor before building a strategy around tax treatment. This newsletter is many things. A CPA is not one of them.

The macro environment matters here more than most income investors realize. Rising interest rates compress fixed-rate preferred prices across the board, but Strategy's series face a double threat: rate pressure and Bitcoin correlation. If the Fed stays hawkish while Bitcoin pulls back, you're getting hit from two directions at once, and neither cares about your cost basis.

Watch Bitcoin's relationship to Strategy's $74,000 aggregate cost basis. Above that line, the company has a comfortable 5.9x debt coverage cushion. Below it, the math shifts from "we're fine" to "let's have a board meeting." At $40,000, total obligations hit 52% of asset value, and the non-cumulative preferred holders are exactly the people whose checks get questioned first.

Watch the dividend declarations. These are non-cumulative and discretionary; the board doesn't have to pay, and if they don't, there's no catching up. One skipped quarter sets a precedent that repricing every series is immediate.

And watch the issuance pipeline. Strategy raised $21 billion in 2025 through seven offerings. Every new issuance dilutes the existing capital structure and adds another mouth to feed. At some point, the question shifts from "can they raise more?" to "should they?"

Strategy's preferred stock series represent a genuinely unique corner of the income investing universe. Yields between 7.33% and 14% are eye-catching in a world where Bank of America preferreds pay 6%, and T-bills are headed south of 4%. But those yields exist for a reason, and that reason is a business model built on one asset, funded by perpetual non-cumulative securities, subordinated to $8.2 billion in debt, and managed by a team whose strategic pivot was "stop making software, start buying Bitcoin."

If that sounds like your kind of trade, the buffet is open. Just know which car you're sitting in, where the exits are, and how much of the ride you can actually afford. The yields are real. The risks are realer. And in this particular casino, the house doesn't always win, but the house always gets paid first.