MicroStrategy Launches New Preferred Stock STRD: Risks and Speculation Behind High Yields

MicroStrategy has once again taken action to increase its Bitcoin position. In recent years, the company has continuously raised funds through various means such as common stock, convertible bonds, and preferred stock to increase its Bitcoin holdings. Against the backdrop of the current bull market, MicroStrategy has launched a new preferred stock product STRD, which is another key step in its Bitcoin-heavy strategy.

STRD is the third class of preferred stock product issued by MicroStrategy, with a planned public offering of 2.5 million shares. The funds raised will mainly be used to purchase Bitcoin and supplement working capital. This product continues the framework of the previous STRK and STRF, but has made new designs in profit distribution and exit mechanisms.

STRD offers a 10% annual coupon rate, but the company does not have a mandatory payment obligation, and interest does not accumulate. This means that investors may face uncertain return risks. Theoretically, MicroStrategy could pay interest by selling Bitcoin holdings, continuous financing, or using operating cash flow. However, stopping interest payments could severely damage the company's reputation and future financing capacity.

Compared to STRK and STRF, STRD has its own characteristics in terms of liquidation priority, yield design, and risk structure. STRK is more suitable for conservative investors seeking stable returns, STRF targets neutral investors who expect to lock in relatively high fixed returns but can accept certain credit risks, while STRD is aimed at aggressive funds with a higher risk tolerance.

The launch of STRD is also considered a strategic move by MicroStrategy to optimize its overall capital structure. By improving the credit support of upper-tier products, STRD, although having a lower liquidation priority, plays an important role in the overall capital structure.

However, the issuance of STRD has sparked controversy in the crypto community. Some commentators point out that this is a "capital magic" or "Ponzi nesting doll." Some analyses suggest that STRD is essentially a Bitcoin accumulation option disguised as a yield tool. When the price of Bitcoin surges, MicroStrategy might redeem at face value; whereas when the price plummets, the company may choose not to distribute returns.

Regarding the future development of MicroStrategy, there is a view that the company may explore more Bitcoin-based financial services, such as lending or participating in quantitative trading, to maintain cash flow, and it may even evolve into a Bitcoin-based bank.

MicroStrategy combines Bitcoin faith with financial engineering through the structured product STRD, hiding complex risk-return models behind its high-interest appeal. This faith-based financial experiment is becoming increasingly complex and deserves ongoing attention from the market.