Saylor’s strategy ramps up sales of preferred in latest Bitcoin purchase

The company, formerly known as MicroStrategy, bought 22,337 Bitcoin between March 9 and March 15, according to a regulatory filing Monday. Roughly $400 million of the purchase was funded through sales of common stock. The remaining $1.2 billion came from at-the-market sales of its “Stretch” perpetual preferred shares. The dividend-paying securities—similar to bonds that never mature—promise investors a steady yield funded ultimately by Strategy’s Bitcoin holdings.

Last week marked Strategy’s largest sale of Stretch since the July initial public offering of the issue. It was also the first time in weeks the firm relied mainly on Stretch to fund its purchases. During that period, Strategy has been marketing the securities as a way for investors and corporations to gain exposure to Bitcoin without taking on the cryptocurrency’s trademark volatility.    

Strategy has built a layered funding machine: It issues debt, preferred stock, and equity—all to buy Bitcoin. Each layer promises investors a different mix of risk and reward, but every layer depends on the same thing: the price of Bitcoin going up.  

On Wednesday, Strategy announced an unlikely taker for its perpetual preferred shares: another company whose balance sheet hinges on Bitcoin’s price. Bitcoin treasury company Strive Inc.—co-founded by former Republican presidential candidate Vivek Ramaswamy—announced that it allocated $50 million, or more than one-third of its corporate treasury, to the securities.

Strive, which owns about 13,300 Bitcoin, is already heavily exposed to the token’s price swings. It’s turning to Stretch to earn a double-digit yield on capital set aside to meet its own preferred dividend obligations.

“Instead of holding idle cash earning low yields in money market funds, we believe it makes sense to allocate a portion of those reserves to in