Michael Saylor, the Yield Gap, and Preferred Stock: A Bitcoin Strategy Deep Dive

Exploring Michael Saylor's Bitcoin strategy, the yield gap between MSTR's preferred stocks, and Metaplanet's preferred share approach.

Michael Saylor's name is pretty much synonymous with Bitcoin these days. From Strategy's massive BTC holdings to Metaplanet's foray into Bitcoin-backed finance, understanding the nuances of their financial instruments, especially preferred stock, is key. Let's unpack the story.

Saylor's STRD vs. STRF: A Yield Tale

Saylor himself recently pointed out something interesting: a yield gap between Strategy's two preferred stock offerings, STRF and STRD. STRF, being the senior security, offers a safer, lower yield (around 9.1%), trading above par at $109. STRD, the junior security, comes with a higher risk but a juicier yield—around 12.7% while trading below par at $78. Think of it like this: STRF is your grandma's bond; STRD is that junk bond your crazy uncle keeps telling you about.

Saylor's puzzled why investors aren't flocking to STRD, given the significantly higher yield. His argument? Strategy isn't about to stiff STRD holders on dividend payments. Doing so would tank STRD's price, and, more importantly, it would hurt Strategy's ability to raise more capital for, you guessed it, more Bitcoin.

Metaplanet's Preferred Share Play

Meanwhile, across the Pacific, Metaplanet is taking a similar, yet distinct, approach with preferred shares. Simon Gerovich, Metaplanet's president, is making the case that issuing preferred shares is a