Analysis: Strategy last week increased Bitcoin holdings for the first time, primarily using preferred shares as the financing tool.

ChainCatcher reports that, according to market sources, Strategy last week first used perpetual preferred stock as the main tool to increase Bitcoin holdings, marking a potential shift in its financing model. The company announced on Monday that it purchased 22,337 Bitcoins, making it the fifth-largest acquisition in history. Of this, $1.18 billion was financed through STRC perpetual preferred stock, approximately 16,800 Bitcoins (based on an average price of $70,000), far exceeding the $396 million raised through the common stock ATM plan.

The common stock ATM plan has previously been the primary tool for accumulating Bitcoin holdings, with total holdings now reaching 761,068 BTC. Based on the current 11.5% dividend rate for STRC, issuing $1.18 billion results in an annual dividend obligation of about $135 million, bringing the company’s total annual dividend burden to over $1 billion. The company has reserved approximately $2.25 billion for these payments, providing a buffer amid rising financing costs.

Since the common stock has fallen over 70%, the company prefers to support the stock price without further dilution of equity. Therefore, in the future, it will selectively use common stock mainly when net asset value multiples are significantly above 1 or when building dollar reserves, relying more on STRC financing to avoid issuing new common stock. Since the ex-dividend date on March 15, STRC has consecutively fallen below its face value of $100 for three days. If the one-month volume-weighted average price remains below face value, the company may consider raising the dividend by an additional 25 basis points to support the price.