Strategy CEO Phong Le stated that retail investors now make up roughly 80% of the holders of the company’s preferred share, STRC, compared to 40% for its common stock. Analysts suggest retail investors are drawn to STRC’s predictable high yield amid the volatility of Strategy’s common stock, which has declined 56% in six months. The firm has raised over $1.5 billion via STRC this month, indicating a shift in its capital-raising focus.
Strategy CEO Phong Le indicated retail investors are showing greater interest in the firm’s preferred share, STRC, than its common stock. He noted in a post that retail investors hold about 80% of STRC, a product engineered to trade near its $100 value and pay an 11.5% annual dividend.
Le suggested this shows retail investors “prefer low-volatility, high-yield digital credit.” This assessment comes as Strategy‘s common stock price has fallen 56% over the past six months to $134.
Analyst Mark Palmer of Benchmark-StoneX said the preference makes sense for a risk-adjusted perspective. “STRC offers a predictable return through its high-yield, low-volatility, and significant Bitcoin overcollateralization that limits downside, and as such it maps better to how most retail investors are accustomed to thinking about income-generating assets,” he stated.
On a notional basis, retail holdings of common stock still outweigh their preferred share allocations. Retail investors hold approximately $18.5 billion worth of common stock and roughly $4 billion in STRC, based on stated percentages and market capitalizations.
Strategy has raised more than $1.5 billion via STRC this month alone. The firm issues more shares when the product trades above its $100 target to fund further Bitcoin acquisition.
