MSTR’s STRK Offering Achieves Record Earnings, Outperforming BTC Price Increase and S&P 500 Since Launch

The author of this analysis possesses shares of Strategy (MSTR).

Strategy’s (MSTR) perpetual preferred stock, known as STRK, has reported its highest weekly revenue from at-the-market (ATM) issues since the launch of the program in February, as noted in a recent SEC filing. The company raised $59.7 million, which has been allocated towards further bitcoin acquisitions.

This capital corresponds to the issuance of around 621,555 STRK shares. The company currently has approximately $20.79 billion remaining within its STRK ATM facility.

Under the leadership of Executive Chairman Michael Saylor, the company is determined to continue its acquisition strategy for bitcoin, maintaining its focus even as bitcoin’s price hovers above $100,000, looking to surpass its peak of $109,000 reached in January. Following the recent purchase on Monday, the total bitcoin holdings increased to 576,230 BTC.

This represents a BTC yield of 16.3%, a crucial performance metric that indicates the year-to-date increase in the ratio of MSTR’s bitcoin assets relative to its fully diluted shares outstanding, effectively showcasing the growth in BTC exposure on a per-share basis.

The latest STRK issuance accounts for nearly 9% of the total funding derived from the ATM program for common stock, which has aggregated $705.7 million so far. This underlines the growing significance of STRK in Strategy’s bitcoin acquisition framework.

STRK provides a fixed annual dividend of 8%, calculated based on a liquidation preference of $100 per share, leading to an annual payment of $8.00 per share.

This results in an effective yield of 8.1%, which is inversely correlated to the price of STRK shares. If the price of STRK increases, the yield diminishes and vice versa.

Since its debut on February 10, STRK’s value has surged by 16%, surpassing bitcoin’s increase of 10%, while the S&P 500 index has seen a decline of 2% during the same timeframe.

Data from Strategy’s dashboard indicates that STRK shows the least correlation with the common stock of MSTR, standing at just 44%. In contrast, the correlation between STRK and larger market indices is considerably higher: 71% with bitcoin and 72% with the SPY ETF.

This indicates that STRK has a distinctive trading profile, which could attract investors looking for differentiated exposure due to its blended nature as a preferred equity instrument linked to bitcoin investments.