Preference Strk’s Strate Strk: High income, high risk? News ad

Microstrategies NASDAQ: MSTRCurrently, doing business as a strategy is a leading player in crypto -markets and recently announced an intriguing security issue: preferred actions. Below I will describe in detail how this type of shares works. I will give an idea of ​​important considerations, thinking about potential investments. All data on profitability and return use prices as of February 12.

Dividend Dynamics: Understanding STKR 8% dividends

Microstrategies today

$ 337.73 +12.81 (+3.94%)

As of 02/14/2025 21:00

52-week range

$ 66.43

▼

$ 543.00

Value is valuable

$ 536.90

On January 31, the strategy announced a sentence of 8.00% of the A Perpetual Strike Prefer Accidents series, selling under the symbol of the StRK ticker. The first thing to understand is that security will pay 8% dividends depending on the price of $ 100 per share. Nevertheless, the opening price of security amounted to $ 80 per share. Thus, the initial buyers, when it cost $ 80, will receive dividends per year a year, which will lead to a yield of 10%. An increase in the price of preferred shares will lead to a decrease in profitability, and a decrease in price will increase profitability. As of the closure of February 12, it is traded at 90 dollars, which makes the yield of 8.9%.

Preferred actions are not maturity; Investors can receive dividends for an indefinite period. Nevertheless, the technological company is not obliged to pay dividends every quarter. Any unpaid dividends accumulate, and the company must ultimately pay them. The company can theoretically postpone the payment of these dividends as long as it wants. Although this is unlikely. This will damage the confidence of investors and, therefore, the total price of shares. The company can also choose dividends through shares of ordinary shares, and not in cash.

Place Strik in the structure of capital: between debts and general

The next important thing that needs to be understood is a place of preferred actions in the structure of the capital of the strategy. The structure of capital refers to an order in which companies should pay interest and dividends to debts and shareholders. It also matters in relation to who receives money in case of bankruptcy. Bond owners are at the top of the structure of capital. This means that companies should pay all interest payments on bonds before preferred or ordinary shareholders receive some kind of dividends.

After the company pays bond holders, it can use the remaining funds for the payment of dividends for preferred shareholders. Only then can the company pay dividends to common shareholders. If the strategy is bankrupt, it must first pay Debtholders. Then, if there are any means remain, he will pay preferred shareholders to 100 US dollars per share plus any unpaid dividends.

Moving convertibility and price

Another important point is the convertible feature of the reserve. Preferred shareholders can change the preferred share of one tenth from the general action. Thus, in order to be profitable for converting shares, ordinary shares should be traded ten times higher than preferred. Based on a price of $ 90, strategy shares will have to be traded at the level of $ 900 for conversion in order to make sense. This is about 175% higher than the price of ordinary shares.

The conversion function also means that the price of privileged shares will change as a change in prices for strategy shares. However, it will move up or down much slower. When the prices for ordinary shares are rising, investors are more likely to use the convertible function.

This increases the cost of preferred shares. But, if the general shares fall, the opposite occurs. Finally, it is important to know that preferred actions are not entitled to vote.

In general, it is impossible to go through every complexity of this sentence for just a few paragraphs. The preliminary prospectus for 139 pages is on the page of strategic relations with investors and is vital for detailed viewing.

Considerations: everything returns to bitcoin

In general, the company has a debt of 6.2 billion dollars. USA and almost $ 600 million. USA as privileged shares. Thanks to his Bitcoinsky (BTC) in the amount of more than $ 46 billion at the time of the last income report, he has a strong ability to fulfill these obligations. However, as in everything related to the strategy, it ultimately boils down to where Bitcoin goes. If its price drops sharply, then the company’s ability to repay the debt and preferred shares. I must also note that if the strategy is trying to sell a lot of bitcoins for a short period of time to pay for their obligations, it can exert a significant lowering pressure on Bitcoin’s price.

However, income is almost 9% very high. This is much higher than many preferred ETFs, which are closer to 6%. In addition, this is a way of indirect rate at the price of Bitcoin from an ordinary correlation of a strategy with cryptography. Understanding the integral strategy of the company remains vital for assessing the advantages of this security.

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