Bitcoin Treasury Financing Model Under Pressure, Strategy and Strive Turn to High-Yield Preferred Stock to Compete for Investors

October 21 - According to Bloomberg, as the financing models of bitcoin treasury companies Strategy and Strive come under pressure, these firms are attracting investors by offering higher-yield preferred stock to sustain their crypto accumulation strategies.

Bitcoin treasury company Strive completed a $630 million preferred stock offering on Tuesday, raising roughly 25% more than its original plan. The preferred stock carries a nominal annualized yield of 15% and was issued at a discount, bringing the effective yield to nearly 17% - far above the yield on one-year high-grade U.S. Treasuries and approaching distressed-debt return levels. Meanwhile, Strategy's financing model is also facing challenges. Its STRC preferred stock, which carries a 12% annualized dividend yield, has not been issued again since its price declined in June. The company is now seeking to push for daily dividend payments and continues to raise funds through additional common stock issuance to purchase bitcoin, resulting in equity dilution for existing shareholders.