Strategy, a significant entity in the digital asset sphere, has recently implemented notable changes to its preferred stock dividend, intrinsically linked to its ambitious Bitcoin acquisition strategy. These financial adjustments unfold against a backdrop of increasing scrutiny from both market analysts and regulatory bodies regarding the capital-raising practices of "Bitcoin treasury companies."
Strategy's Financial Maneuvers
The company has notably raised the annual dividend rate on its Variable Rate Series A Perpetual Stretch (STRC) Preferred Stock from 10% to 10.25%, effective October 1. This marks the second increase in under 30 days, with a previous adjustment from 9% to 10% in early September. These dividend enhancements run parallel to Strategy's aggressive expansion of its Bitcoin holdings. A recent acquisition of 4,048 BTC, valued at $449.3 million, has propelled Strategy's total Bitcoin reserves to an impressive 636,505 BTC, purchased at an aggregate cost of $46.95 billion. This substantial position now constitutes over 3% of Bitcoin's capped supply, cementing Strategy's status as one of the largest corporate custodians of the digital asset.
Funding Debates and Industry Scrutiny
Strategy's financing methods for its considerable Bitcoin investments have attracted considerable attention and critique. The September Bitcoin purchase, for instance, was primarily financed through sales of Class A common stock, supplemented by preferred share programs. This funding mix drew criticism from short seller James Chanos, who contended it indicated reduced leverage and a potentially waning investor appetite for income-focused securities. However, Strategy has asserted that demand remains strong, citing its success in raising $5.6 billion through preferred stock offerings in 2025 alone. The broader sector of "Bitcoin treasury companies" is also under intensifying examination. Regulatory concerns are mounting over capital-raising structures, particularly Private Investment in Public Equity (PIPE) deals, which reports indicate can exert downward pressure on share prices and lead to losses for current investors. Moreover, US financial watchdogs, including the SEC, are reportedly investigating whether these firms or connected individuals have illicitly benefited from trades made prior to official crypto acquisition announcements, signaling a heightened focus on market integrity and transparency within the digital asset space.
