Strategy (MSTR) Stock: Is a 16% Yield Worth the Risk Right Now?

TLDR

• Strategy’s four preferred stock issues now yield 10%–16% after dropping about 10% in price over the past month.
• Bitcoin has fallen roughly 30% this year to $62,000, dragging MSTR stock down nearly 40% to $94.
• Strategy holds $2.6 billion in cash — enough to cover around 1.5 years of its $1.8 billion annual preferred dividend bill.
• The company has no income from its 843,000 Bitcoin holdings, making dividend sustainability the key investor concern.
• Strategy marketed the preferred heavily to retail investors via Robinhood, Morgan Stanley, and social media ads.

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Strategy’s preferred stock experiment is running into trouble. The company’s four Nasdaq-listed preferred issues — nicknamed Stretch (STRC), Stride (STRD), Strike (STRK), and Strife (STRF) — have dropped about 10% in price over the past month and now yield between 10% and 16%.

Strategy Inc, MSTR

That’s a far cry from the 6% yields on preferred stock issued by banks like JPMorgan Chase and Bank of America.

MSTR stock itself is down nearly 40% this year, trading around $94. Bitcoin, the core asset backing all of this, has dropped about 30% in 2025 to $62,000 per coin.

The flagship Stretch preferred (STRC) was pitched as a Bitcoin-backed Treasury bill — a floating-rate security designed to trade close to its $100 face value. Strategy raised more than $10 billion through STRC alone. It now trades around $86, carrying a current yield of roughly 14%.

Strategy started issuing preferred stock in early 2025, using the proceeds to keep buying Bitcoin. The company now holds around 843,000 coins — about 4% of all Bitcoin in existence — worth over $50 billion at recent prices.

No Income, Just Bitcoin

The core problem is simple: Strategy generates zero income from its Bitcoin stash. There are no dividends, no interest, no revenue tied to the coins sitting on its balance sheet.

That makes the $1.8 billion in annual preferred dividends a real pressure point. The company has addressed this by building up cash reserves of about $2.6 billion — enough to cover roughly 1.5 years of payments.

Strategy has also said it plans to maintain a reserve equal to one full year of preferred dividend and interest payments going forward. It has raised cash through common stock sales and Bitcoin sales to get there.

Preferred stock is a form of equity, not debt. That means Strategy could technically skip a dividend without triggering a default. But management appears intent on keeping payments going to protect its ability to issue new preferred securities and support the retail investors who bought in.

A Retail-Heavy Investor Base

Strategy went after everyday investors in a way most preferred issuers don’t. It marketed through Robinhood, brought Morgan Stanley into its underwriting group to tap that firm’s retail client base, and ran ads on X and other platforms — including one modeled on the HBO show Industry.

Financial advisors, family offices, and registered investment advisors were also targeted.

That retail-heavy base means a lot of individual investors are now sitting on losses, holding securities that the market has started pricing like low-grade junk bonds.

Wall Street analysts remain bullish on MSTR common stock, with 12 Buy ratings and one Hold among 13 analysts tracked by TipRanks. The average 12-month price target sits at $287.58.

The four preferred issues continue to trade on the Nasdaq, with yields ranging from 10% on the lower end to 16% on the higher end as of early July 2026.