Terms

Series

10.00% Series A Perpetual Strife Preferred Stock

Liquidation Preference

$100.00

Coupon Rate

10%

Rate Type

Fixed

Annual Dividend

$10.00

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

No

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Including Convertible Notes (~$8.22 Billion As Of March 31, 2025), All Liabilities Of Subsidiaries (Structurally Junior); Pari Passu With: Dividend Parity Stock (If Any Issued In Future), Liquidation Parity Stock (If Any Issued In Future); Senior To: Class A Common Stock, Class B Common Stock, 8.00% Series A Perpetual Strike Preferred Stock, All Other Junior Equity Securities

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: STRF) is offering up to $2.1 billion of its 10.00% Series A Perpetual Strife Preferred Stock via an at-the-market facility, with a $100 liquidation preference per share (subject to upward adjustment but never below $100). The fixed 10% coupon yields $10.00 per share annually, paid quarterly in arrears on March 31, June 30, September 30, and December 31. This stock is cumulative — meaning unpaid dividends accrue and compound (starting at 11% rising 100 bps per period to a maximum of 18%) rather than being forgiven, though the board retains discretion not to declare dividends. The instrument is perpetual with no mandatory redemption date. Redemption is at the issuer's option only when outstanding shares fall below 25% of total historical issuance, or upon a tax event, each at liquidation preference plus accrued dividends. The perpetual strife preferred stock sits above common equity (Class A and Class B shares) and the 8.00% Series A Perpetual Strike Preferred Stock, but is junior to all of Strategy's existing and future debt obligations, which totaled approximately $8.22 billion in convertible notes as of March 31, 2025. Critically, this is a holding company issuance: the preferred is structurally subordinated to all liabilities of Strategy's operating subsidiaries, meaning subsidiary creditors and trade payables are effectively paid before preferred stockholders in a stress scenario. There is no regulatory (Tier 1) capital call provision, as Strategy is not a bank. The only extraordinary redemption right beyond the 25%-threshold optional call is a tax event redemption, also at liquidation preference plus accrued dividends. At $100 par, the effective yield is 10.00% ($10.00/year or $2.50/quarter). Payment dates are the last day of each calendar quarter; record dates fall on the 15th of March, June, September, and December. If a dividend is not declared, the company must use commercially reasonable efforts over 60 days to raise capital and pay on a deferred dividend payment date; failure to do so triggers escalating compounded dividends and, after four consecutive missed quarters, preferred stockholders gain the right to elect a board director. Tax treatment is uncertain: dividends will qualify for the preferential QDI rate or corporate DRD only if Strategy has sufficient current or accumulated earnings and profits, which is not assured given its bitcoin-focused model. Additionally, fast-pay stock regulations could create adverse tax consequences if shares are deemed to return investors' capital rather than provide a return on capital.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If accumulated regular dividends on the perpetual strife preferred stock are not paid in full for all prior completed periods, the issuer is prohibited from paying dividends on or repurchasing common stock, the perpetual strike preferred stock, or any other junior securities; dividends on parity preferred may only be paid pro rata alongside perpetual strife preferred dividends.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 52 (Average)