Strategy’s $8B capital shift – Here’s why analysts are calling it a ‘win’

Bitcoin corporate treasury pioneer Strategy (Nasdaq: MSTR), formerly MicroStrategy, has hit a key ‘healthy’ milestone in its capital-raising structure.

The firm’s preferred stocks ($8.36 billion) have, for the first time, surpassed its total convertible debt ($8.21 billion).

For the unfamiliar, convertible debt is like a loan with a maturity date and bankruptcy risk if one defaults.

This has been Strategy’s key capital-raising tool from 2020 to 2023, and the risk could escalate during major BTC drawdowns. This debt risk factor has hung over the Strategy, especially ahead of the 2028 maturity deadline.

But the firm unveiled several preferred stocks, to complement its common stock, MSTR, to raise capital for BTC buys.

Preferred stocks vs. MSTR

Preferred stocks, on the other hand, offer a flexible capital-raising option, and payable dividends (not interest) can be deferred because they have no maturity date like convertible debt.

In other words, with no fixed maturity and repayment, it reduces the bankruptcy risk even during major BTC downturns, noted analyst Pio Vincenzo.

“This is a huge milestone for MSTR. It validates the preferred equity strategy and the transition away from convertible debt. The old strategy had an actual bankruptcy risk.”

Chaintany Jain, an official at Strategy, also hailed the shift as more ‘scalable’ than the old convertible debt.

For his part, analyst Rohan Hirani noted that the heavy reliance on preferred stocks would help Strategy ‘dismantle’ the bankruptcy-linked vulnerability, allowing the firm to increase its BTC bet.

Others viewed the shift as a ‘structural win’ and a ‘bullish path’ for MSTR stock price.

Strategy unveiled its first preferred stock, Strike [STRK], in early 2025. Later on, it added four more preferred stocks: Strife [STRF], Stride [STRD], Stretch [STRC], and Euro-denominated Stream [STRE], which was launched in November 2025.

Strategy’s holdings cross 700K BTC

With the preferred stocks and MSTR, Strategy has scaled its BTC holdings from 446K BTC in December 2024 to 709K BTC as of early January 2025.

In fact, over the past year, Strategy has made more Bitcoin buys worth over $1 billion each.

However, the MSTR stock price has traded below $200 since BTC lost $100k in November. Even so, MSTR has outperformed BTC on a year-to-date (YTD) basis and traded at $163 at the time of writing. Meanwhile, BTC traded at $89.9k.

Final Thoughts

• Strategy has reached a milestone in its capital-raising structure by reducing its exposure to debt.
• Analysts believe the shift reduces bankruptcy risk and is ‘bullish’ for the MSTR stock price in the long run.