Strategy’s New Offer Comes with a Catch

Strategy launched STRD, another bitcoin-backed preferred stock on Nasdaq and now there’s a 10% dividend on the table.

There’s a feeling out there that big yield is the new safety net but if you actually read what this is, you’ll see STRD pays ten percent only if the board decides to pay.

Nothing is owed to you if they skip a payout.

It’s showing that the company is asking you to trust both their judgment and their future ability to keep the money flowing. I wonder if people are really seeing that detail.

You have a stock now trading on Nasdaq that says right up front the plan is to use your money to buy even more bitcoin. No complicated tricks, just more exposure to a volatile asset that could double or could cut in half before you even notice.

Well, it's Bitcoin so no need to think right?

Anyways, they’re raising almost a billion dollars selling these shares and I have to respect the transparency. Plus a board member buying 5,000 shares makes me even believe further that the insiders actually believe the story they’re telling. But that insider already holds other Strategy stock so maybe he just likes what he knows or it’s just part of the game.

Some people want to treat preferred stock like it’s some safer alternative to regular shares. That’s never really been true but it’s even less true when your dividends depend on the board’s mood and not on any "ironclad" contract. There are no management fees but you are buying risk and hoping for a reward that will only show up if things go exactly as planned.

You should be clear about that.

Credit

The thumbnail of my post was generated with Chatgpt 4.1 model.

Posted Using INLEO