MicroStrategy preferred stock STRF is issued at a discount of $85. Will the 10% high yield attract retail investors to buy?

Self-proclaimed as a Bitcoin development company, Strategy (, formerly known as MicroStrategy), announced on 3/20 the issuance of 8,500,000 shares of permanent preferred stock with the code STRF. This is significantly higher than the previously estimated 5 million shares, but it is still issued at a discount of 85 USD, with the transaction expected to be completed by 3/25.

( MicroStrategy Strategy New Bitcoin Blueprint, STRF How to Expand the Bond Market for Retail Investors to Easily Invest )

Preferred stock STRF issuance conditions

The newly launched STRF, although named as perpetual preferred shares and seemingly having equity characteristics, is actually aimed at the bond market with a market value of up to 300 trillion. Its conditions are as follows:

Code: STRF

Issuance Price: 85 USD

Face value ( is also the redemption price ): 100 US dollars

Interest Rate: Annualized 10%, with quarterly interest payments, specifically on March 31, June 30, September 30, and December 31 each year, with the first payment scheduled for June 30, 2025.

Compound dividends: If the current period's dividends cannot be paid, the unpaid portion will accumulate as "compound dividends" (compounded dividends), and the annual interest rate will increase by 100 basis points (or 1%) each quarter, with a maximum annual interest rate of 18%.

Can retail investors invest in STRF?

General companies have a small issuance of convertible bonds, which are typically locked in for professional investors to subscribe. However, this time, Strategy leverages the issuance of STRF, which will be listed on the secondary market, allowing any investor with a securities account to buy in. The issuance price is around one hundred dollars, making it indeed smart to allow investors to easily invest small amounts of around one hundred!

However, this product has no expiration date, meaning it cannot guarantee the repayment of the principal at a fixed point in time for one hundred dollars, which is somewhat different from traditional bonds. The issuance at a discount of 85 dollars has raised the original 10% coupon rate to 11.8%, making the yield quite attractive.

Note: The 10% distribution is calculated based on a foundation of 100 dollars, so the annual distribution is 10 dollars. If the investor's cost is 85 dollars, the yield comes to 10 ÷ 85 = 11.8%.

However, investors are reminded that dividends from US stocks are subject to a 30% tax rate, and the actual yield will drop to 7%~8%.

STRF is expected to enter the secondary market for trading before the end of the month after the transaction is completed on 3/25.

How is the performance of STRK preferred stock?

Strategy launched the convertible preferred stock STRK at a discounted price of 80 USD at the end of January, reaching a peak of 100.25 USD during the period. However, with the decline of Bitcoin and the company's reintroduction of the higher dividend yield STRF, the stock price has recently hovered around 85 USD. Its first dividend will also be distributed on 4/1.

This article discusses whether MicroStrategy's preferred stock STRF, issued at a discount of $85, can attract retail investors with a high interest rate of 10%. It first appeared in Chain News ABMedia.