Wall Street’s Latest Gimmick? Strategy Drops STRD Perpetual Preferred Stock IPO

Another day, another financial instrument designed to make bankers rich while retail investors scratch their heads. Strategy just launched STRD—a perpetual preferred stock IPO that’ll either print money or implode spectacularly.

Perpetual preferreds: The ’buy now, worry never’ asset class Wall Street can’t quit. No maturity date, fixed dividends, and all the complexity of a DeFi whitepaper—but with suits instead of hoodies.

Here’s the kicker: These things trade like bonds but dodge corporate balance sheets. Perfect for institutions craving yield in a zero-rate world. Retail buyers? Good luck pricing that convexity.

STRD joins the parade of hybrid securities that’ll either stabilize portfolios or become the next ’AAA-rated’ collateral that blows up in 2027. Place your bets—the house always wins.

Strategy to offer dividends on STRD

Strategy (MSTR, STRF, STRK) announced its plans to sell 2.5M of the new preferred STRD shares. Depending on market conditions and approval, Strategy will sell 10% Series A preferred stock with the STRD ticker. 

The proceeds from the sale will go toward the company’s regular BTC purchases, as well as general corporate purchases and working capital. The preferred stock sale will give some momentum to the company’s BTC purchases, though in the past weeks, the buying was mostly financed with MSTR sales and smaller placements of STRK.

The latest BTC purchase was financed with STRF and STRK proceeds. 

STRD will carry non-mandatory dividends at a 10% yearly rate, after approval by the board of directors. If the board declares a dividend, STRD will observe payment periods on March 31, June 30, September 30, and December 31 of each year. The first dividend payment period will start on September 30. 

The STRD dividends will be non-cumulative and will not accrue additional interest or rewards. The dividends will be payable fully in cash. The STRD shares can accrue over 10% in dividends during favorable conditions. 

Strategy also reserves the right to redeem all STRD shares if the amount of shares outstanding is less than 25% of the total supply. In that case, Strategy has a right to a full redemption, but no partial purchases. 

The liquidation price of STRD is set at $100, and holders can also demand repurchase in the case of unusual events and unfavorable market conditions. 

The STRD asset carries a higher risk

Compared to STRF and STRK, the new STRD asset is higher-risk. The priority in case of liquidation will be above common stock holders, but below STRK. The new STRD shares will carry no BTC upside. 

Strategy currently carries 0.00209 BTC per share, though not all investors will have a claim on that reserve in the case of unfavorable market events. The sale is considered a boost in the short term, especially for investors seeking passive income. However, the non-cumulative, non-mandatory dividends are seen as risky, in addition to exposure in the case of a bear market. 

Strategy has mentioned it may sell some of its BTC holdings to cover dividend payments. So far, Strategy has not announced sales, though not all of its wallets are public. The current stock strategy has created a flywheel effect for BTC, but only during a period of growth, with high risks during a bear market.

The recent stock sale coincides with BTC stability, as the price recovered to $105,375. MSTR has fallen to $372.27, following a brief rally above $400.

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