MicroStrategy, Inc. 10.00% Series A Perpetual Stride Preferred Stock (STRD)
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MicroStrategy, Inc.’s 10.00% Series A Perpetual Stride Preferred Stock has a liquidation preference of $100 per share. It is non-callable at the issuer’s option and has no stated maturity. The stock pays non-cumulative distributions at an annual rate of 10.00% ($10.00 per year or $2.50 per quarter), with payments made quarterly.
This is the third preferred stock MicroStrategy has issued this year. It was priced at $85, with a par value of $100. The steep discount is primarily due to this issue offering less investor protection compared to the previous two.
We’ll provide a brief comparison between the three preferred stocks. We already hold STRK in our portfolio, and you can read our previous analysis here.
Comparison Between Issues
STRD offers the highest yield among the three preferred stocks at 11.25%. It’s worth noting that both STRK and STRF will trade ex-dividend on June 13, 2025.
STRD is junior to both of the other issues and lacks a conversion feature, making it the least protective for investors. However, a positive sign is that management purchased shares during the IPO, which may indicate confidence in the offering.
According to the filings, CEO Phong Le purchased 4,500 STRD shares during the offering at $85 each, totalling $382,500. CFO Andrew Kang also acquired 2,250 shares, amounting to $191,250.
Conclusion
We’ve held STRK since February 2, 2025, and are currently up 26% on the position. We continue to believe STRK is the most attractive option for long-term investors among MicroStrategy’s preferred stock offerings. Considering all of the above, we have no intention of switching to another issue.
STRD was priced at $85 per share during the IPO, similar to the other two preferred stocks. Once listed on the NYSE, it becomes accessible to all investors who couldn't participate in the IPO. As we've seen with past issues, it often takes time for the price to trend upward.
According to our model, STRD should be trading above $95 per share to be fairly valued relative to the company’s other preferred stocks.
We’re adding STRD as a trade, initiating a buy at $89 per share. Our expectation is to close the position within the next few weeks, targeting a capital gain.