Research firm K33 estimates Strategy would have held 843,303 BTC on Oct. 12 had it largely avoided financing bitcoin purchases with STRC preferred stock. The firm says STRC added $725 million to the company's annual dividend bill, and its head of research calls the preferred model a mistake.
Strategy would have held 843,303 BTC on Oct. 12 if it had largely avoided using STRC preferred stock to finance bitcoin purchases this year, according to research and brokerage firm K33. The company held 848,250 BTC at the time.
K33 rebuilds Strategy's balance without STRC
K33 Head of Research Vetle Lunde removed the roughly $7.5 billion Strategy raised through STRC in the first half of 2026. He then assumed the $4 billion earmarked for the dollar reserve from May to August and $1.6 billion in STRC buybacks had gone into bitcoin instead. K33 also assumed Strategy would have avoided 90% of its STRC dividend payments and spent the difference on bitcoin.
The preferred shares let Strategy raise money for bitcoin purchases without issuing more MSTR shares, but they came with dividend payments the company must continue to meet. Lunde questioned the approach, and, asked whether the preferred model was a mistake, wrote: "We believe the answer to that question is yes".
STRC adds $725 million to the dividend bill
K33 put annual preferred dividend obligations at $1.56 billion, up from about $830 million earlier this year, and calculated that STRC's expansion accounted for $725 million of the increase. At $83,000 per bitcoin, Lunde put the additional annual costs at the equivalent of roughly 8,740 BTC. He estimated that amount would erase the 4,947 BTC gap between Strategy's holdings and K33's hypothetical balance in about seven months.
Strategy's dollar reserve offers some protection. K33 estimated it could cover around 42 months of dividends, which reduces the likelihood that Strategy would need to sell bitcoin. However, Lunde questioned the expense of holding the cash, assuming a 4% return on the reserve against a 12% coupon on STRC, and argued that common stock issuance would be a more efficient way to fund future purchases.
STRC trades just below par after buybacks
Strategy has heavily bought back STRC shares in recent weeks, and they closed at $99.90 on Oct. 13, just below their $100 par value. The company proposed moving STRC and three other preferred stocks to daily dividend payments in September, a change that still requires shareholder approval.
Bitcoin traded down 0.3% on Wednesday at $82,863, according to The Block's prices page.
Source: The Block
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