The iPhone moment for Michael Saylor’s preferred stock 'Stretch' at Strategy

Core Insights - Michael Saylor, executive chairman of Strategy (MSTR), introduced the fourth perpetual preferred equity offering, Stretch (STRC), which he describes as a transformative moment for corporate finance [1] Group 1: STRC Overview - STRC is characterized as "Short Duration High Yield Credit" and is designed to function like a high yield, low volatility cash instrument, offering an 11% annual dividend paid monthly based on a $100 par value [2] - The dividend for STRC can be adjusted monthly under preset rules, aiming to keep its trading price close to $100 and minimize price volatility typically associated with high-yield securities [2] Group 2: Investment Appeal - STRC provides an attractive yield of approximately three times that of short-duration U.S. Treasury yields, which are near 3.5%, without the risks associated with long-duration securities [3] - Within Strategy's capital structure, STRC has a senior position over common equity and other preferred shares but is junior to corporate debt, enhancing its claim on cash flows while allowing capital raising without increasing leverage [3] Group 3: Capital Raising and Bitcoin Purchases - Strategy funds its bitcoin purchases through at-the-market share sales when the security is trading at $100 par value, having raised $119.1 million from STRC ATM sales and $1.12 billion from common stock issuance to acquire 13,627 bitcoin [4] - The STRC dividend has been raised multiple times to 11% to attract investors, with recent trading volumes significantly exceeding averages, indicating strong market interest [5] Group 4: Strategic Objectives - The company's goal is to maintain STRC trading at or near par to facilitate the accumulation of more bitcoin [6]