Summary Strategy (MSTR) raised $1.44 billion in cash, pivoting from aggressive Bitcoin buying to bolstering liquidity for preferred stock dividend obligations. This capital infusion de-risks preferred shares, particularly STRD, providing nearly two years of dividend runway and creating short-to-medium term upside potential. With preferred ATM issuance unattractive below par, STRD’s limited dilution risk and current price below IPO make it compelling for capital appreciation. I see little reason to own MSTR common stock; preferreds offer better downside protection while spot ETFs provide cleaner Bitcoin exposure. In mid-November I downgraded Strategy's common stock shares ( MSTR ) from 'hold' to 'sell' as well as Strategy's Strife perpetual preferred class shares ( STRF ) from 'buy' to 'hold.' The major point of emphasis in that piece was that the meltdown in the preferred class shares further degraded the company's ability to raise capital to buy more Bitcoin. Coupled with the fact that MSTR was already trading at a basic mNAV discount, the larger concern was that Strategy's prospects for paying the nine-figures in dividends that it owes preferred stock holders before the end of the year looked challenging. I posited a handful of possibilities and concluded that Strategy would ultimately continue diluting its common stock shareholders. Just two weeks later, Strategy has done exactly that. While I continue to believe MSTR is a massive avoid going forward, things look dramatically different for those with exposure to Strategy's preferred shares. The company announced a major cash raise on December 1st that I think de-risks the preferred stocks considerably. In this update, we'll get into the specifics of that capital raise as well as some of the signals that I think investors can take from Strategy's shift in treasury management. $1.44 Billion Cash Infusion Since the launch of the company's preferred stock offerings earlier this year, Strategy had raised $9 billion in capital through the MSTR ATM at the end of November. On December 1st, the company announced an additional $1.48 billion in capital raised through the MSTR ATM; this time, however, Strategy is choosing to sit on almost all of the cash rather than buy more Bitcoin ( BTC-USD ) with it as it has been doing for the last several years. This is a massive pivot in how the company is managing its capital and I'm taking two major takeaways from it. First, I think this move de-risks the preferred stocks considerably. As an extension of that, I think it makes the Perpetual Stride Preferred Stock ( STRD ) shares quite interesting as a short-to-medium term capital appreciation idea. My second takeaway is more signal-related and we'll get into that in a moment. First, $1.44 billion in cash gives Strategy nearly two full years of dividend payment runway based on the company's current obligation breakdown: Strategy Between convert coupons and preferred shares, Strategy has an annual obligation of about $800 million. Of course, the $1.44 billion in cash covers the company's payment obligations for close to two years provided Strategy doesn't raise any more capital through the preferred stock ATMs. Of the remaining ATM availability, roughly $9.8 billion of that potential stock issuance yields better than 10% with only $1.6 billion of that capital being available above par: ATM Product MSTR STRK STRF STRD STRC Remaining Availability $14,374.8 $20,335.7 $1,637.3 $4,132.8 $4,042.4 Total ATM $21,000.0 $21,000.0 $2,100.0 $4,200.0 $4,200.0 % Used 31.55% 3.16% 22.03% 1.60% 3.75% Dividend % - 8% 10% 10% 10.5% Effective Yield - 9.3% 9.2% 12.7% 11% Source: As of December 2nd, 2025 close Thus, I suspect Strategy's usage of the preferred stock ATMs will continue to be limited unless those share prices begin trading at or above par again. This makes STRD very intriguing to me at current levels - which happen to be under the $85 IPO price. Despite having $4.1 billion in remaining ATM availability, Strategy has barely touched the ATM on this product because doing so would raise less capital than the notional value of the obligations created. It's a fast path to flywheel reversal at these Bitcoin prices if Strategy raises with anything other than the common stock. 1 month performance (Seeking Alpha) If we look at the one month price performance of all of the dollar-denominated preferred shares against MSTR and Bitcoin, we see the story crystal clear; Bitcoin is down big, MSTR is behaving like a 2x leveraged Bitcoin fund, and the preferred shares are generally holding their own. With 7 quarters of dividend funding, I think these stocks will re-rate closer to par. At $78.85 per share, that gives STRD potential 15-25% upside before dividends if it trades back between $90-$100 per share as it did in July when confidence in the preferred stocks was stronger. The Other Signal In my view, this $1.4 billion cash raise is a clear signal that Bitcoin's top for this cycle is already in . Strategy has notoriously been one of the biggest buyers of Bitcoin over the last two years. It has been a buyer indiscriminate of price due the market's appetite for risk and the company's ability to raise capital for fueling BTC purchases. At least to some degree, broad investor interest in the spot ETFs and other Bitcoin proxies has benefited from Strategy's indiscriminate bid. However, given the current market dynamics, I suspect large scale BTC buying from Strategy is over for the time being. My view is this will have a ripple effect broadly in the Bitcoin investment space. Beyond that, we could realistically see the company entertain Bitcoin sales if MSTR continues to lose favor with shareholders. In addition to lowering guidance for Bitcoin's year end price from $150k per coin to a range of $85k-110k, Strategy has also offered parameters for Bitcoin sales: Strategy With an mNAV below 1.0, Strategy will entertain either selling Bitcoin or encumbering it through derivatives to raise USD reserve funding. To be clear, I don't think any of this is bad for Strategy the company or for preferred stock shareholders. From my vantage, Strategy is reading the tea leaves and is taking a more responsible capital allocation position that allows it to survive a forthcoming 'Crypto Winter' and live to see another cycle. However, what might be good for the company isn't always good for common stock shareholders. For the first time in at least the last 14 months, Strategy just finished a capital raise that resulted in a negative quarter-to-date "BTC Yield." Closing Summary I continue to see very little reason to own the MSTR common stock at this point in time. MSTR continues to be the primary piggy bank funding both Strategy's Bitcoin purchases and its software business losses. The preferred stocks have performed better when Bitcoin goes down and they pay shareholders through the dividend yield. If you want Bitcoin exposure, the spot ETFs offer a safer alternative as they won't trade at size-able NAV discounts. And if you want leverage on a Bitcoin rally, you could simply go with the 2x funds over shorter time frames. While I'm not going to say STRD is completely de-risked since it's not a mandatory dividend, for a quarter or two - or until it trades back above $90 - I think the risk reward skews to the long side.
