The Bitcoin treasury company’s strategy will continue to be based on selling its preferred shares to acquire Bitcoin, moving away from its strategy of selling common shares, says CEO Phong Le.
“We will start moving from equity capital to preferred capital,” Le he said Bloomberg’s “The Close” on Wednesday.
Stretch (STRC) is Strategy’s perpetual preferred stock, launched in July and aimed at buyers looking for stability, offering an annual dividend of over 11%.
STRC is the company’s fourth perpetual preferred offering introduced to finance Bitcoin (BTC) purchases. This is an alternative to issuing recent shares, which dilute its share price.
Le acknowledged that preferred stock “requires some seasoning” and marketing to convince merchants to buy into the offering, but added that “we expect Stretch to be an important product for us throughout the year.”
The strategy may resume the offer once STRC reaches $100
STRC regained its $100 face value at the close of trading on Wednesday for the first time since mid-January, which Le said was “the story of the day.”
Shares fell below $94 earlier this month as Bitcoin crashed below $60,000, but now trading at par – a price the strategy has identified as a floor – the company may offer shares again to fund more Bitcoin purchases.
Bitcoin has traded steady at around $66,800 over the past 24 hours, compared with an intraday high of over $68,000.
Buying Bitcoin Treasury Rivals ‘Distraction’
Analysts warn that the cryptocurrency vault space is becoming crowded as companies compete for a tiny segment of traders, leading to some companies’ cryptocurrency holdings being worth more than the companies themselves.
Related: Saylor’s strategy buys $90 million in Bitcoin because the price is below the cost basis
In that case, some analysts said rival treasury firms could acquire underperforming companies to get their hands on bitcoin cheaply, but Le said Strategy was not interested in making such a move.
“I think in any new market, whether it’s electric cars, artificial intelligence or SaaS software, you want to focus on your core product,” Le said. “I think it would be a distraction to buy another digital asset vault company at a discount to net asset value.”
Strategy (MSTR) stock ended Wednesday down more than 5% at $126.14.
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