Terms

Series

Variable Rate Series A Perpetual Stretch Preferred Stock (STRC Stock)

Liquidation Preference

$100.00

Coupon Rate

9%

Rate Type

Variable

Annual Dividend

$9.00

Payment Frequency

Monthly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

July 31, 2025

First Call Price

$101.00

Capital Stack Ranking

Junior To: Strf Stock (10.00% Series A Perpetual Strife Preferred), All Existing And Future Indebtedness Including Convertible Notes, All Liabilities Of Subsidiaries (Structural Subordination); Pari Passu With: Any Future Dividend Parity Stock Or Liquidation Parity Stock; Senior To: Class A Common Stock, Class B Common Stock, Strk Stock (8.00% Series A Perpetual Strike Preferred), Strd Stock (10.00% Series A Perpetual Stride Preferred)

Regulatory (Basel III) Call

No

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Prospectus Summary

MicroStrategy Incorporated d/b/a Strategy (Nasdaq: MSTR) is offering shares of its Variable Rate Series A Perpetual Stretch Preferred Stock (ticker: STRC) in an at-the-market program of up to $4.2 billion. Each share has a stated/liquidation preference of $100 and carries an initial dividend rate of 9.00% per annum, payable monthly, but the rate is variable — the issuer may reset it each monthly period at its sole discretion, subject only to a 25bp-per-period step-down cap and a SOFR floor. STRC Stock is cumulative, meaning unpaid dividends accrue with monthly compounding, but the issuer retains broad discretion to keep dividends low as long as SOFR conditions are met. The instrument is perpetual with no mandatory redemption date. STRC Stock sits in the middle of Strategy's capital stack: it is senior to common stock and to both the 8.00% STRK and 10.00% STRD preferred series, but it is explicitly junior to the 10.00% STRF preferred stock and to all existing and future indebtedness (~$8.24 billion face value of convertible notes as of July 2025). As a holding-company obligation, STRC is structurally junior to all liabilities of Strategy's operating subsidiaries, meaning subsidiary creditors are paid first before any assets flow up to preferred stockholders. There is no regulatory capital redemption provision. The issuer has an anytime optional redemption right at $101 per share plus accrued dividends, a clean-up call at liquidation preference if outstanding shares fall below 25% of total issued, and a tax-event redemption at liquidation preference. At the initial 9.00% rate on a $100 stated amount, annual income is $9.00 per share ($0.75/month); the first declared dividend was $0.80 for August 31, 2025. Record dates fall on the 15th calendar day of each payment month. Dividends may or may not qualify for the preferential 15%/20% QDI rate or the corporate dividends-received deduction, as Strategy may lack sufficient current or accumulated earnings and profits — investors should assume ordinary income treatment until confirmed otherwise. The dividend stopper works in both directions: Strategy cannot pay junior dividends (common, STRK, STRD) unless STRC dividends are current, but STRC dividends themselves are blocked if STRF dividends are unpaid. The fast-pay stock risk is a material tax concern: if the IRS treats STRC as fast-pay stock, adverse reporting obligations and penalties could apply to all holders.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If STRC Stock dividends are not paid in full, Strategy cannot pay dividends on common stock, STRK Stock, or STRD Stock (junior securities); conversely, if STRF Stock dividends are not paid in full first, Strategy cannot pay dividends on STRC Stock.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 36 (Weak)