Strategy's STRC Preferred Stock Surges Near IPO Price Amid MSTR Decline

Strategy Inc's Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) is trading near its initial public offering price of $90, while MicroStrategy common shares (MSTR) have fallen over 7% intraday.

The preferred stock was created by Strategy as a yield instrument to raise capital from income-hungry investors. It currently pays an annualized dividend rate of 12%, variable and adjusted monthly by the board, making it one of the most generous preferred stocks in the market.

Strategy used the proceeds from the initial public offering to buy 21,021 Bitcoin at an average price of approximately $117,256 per coin. The company's creditworthiness and ability to keep paying dividends are what investors are buying into, not a direct claim on the Bitcoin sitting in its treasury.