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0 sats \ 0 replies \ @Bell_curve OP 9 Jul \ on: Profiles of STRK, STRF and STRD Stacker_Stocks
Investing in STRK, STRF, and STRD—MicroStrategy’s (now Strategy’s) preferred shares—offers compelling yields, but they come with distinct risks. Here's a breakdown of the key ones:

⚠️ 1. Bitcoin Exposure Risk

All three securities are tied to Strategy’s core business model: accumulating Bitcoin. This creates indirect crypto exposure even for preferred shareholders.
  • If Bitcoin prices plummet, Strategy’s balance sheet weakens, potentially affecting its ability to pay dividends.
  • In a severe downturn, the company might delay or suspend dividends, especially for non-cumulative issues like STRD.

🧾 2. Dividend Payment Risk

TickerDividend TypeRisk
STRKNon-cumulativeMissed dividends are not owed later. If skipped, you lose that income.
STRFCumulativeMissed dividends accrue and must be paid before common stock dividends.
STRDNon-cumulativeNo dividend history yet; highest risk of non-payment.
STRD’s dividends are not guaranteed and may be deferred indefinitely without penalty to the company.

🧨 3. Capital Structure Subordination

  • STRK is senior to STRD but junior to STRF.
  • STRF has the highest priority among the three in liquidation scenarios.
  • STRD is the most junior, meaning it’s last in line if Strategy faces financial distress.

📉 4. Liquidity & Market Volatility

  • These preferreds are thinly traded, especially STRD, which can lead to:
    • Wide bid-ask spreads
    • Price swings unrelated to fundamentals
  • STRK’s price is also influenced by MSTR’s stock price, due to its convertibility feature.

🧮 5. Dilution & ATM Offerings

  • Strategy has launched at-the-market (ATM) programs to sell more STRD shares—up to $4.2 billion worth.
  • This can dilute existing holders, pressure prices, and increase the company’s dividend obligations.

🧠 6. Optional Redemption Risk

  • Strategy can redeem these shares under certain conditions, such as tax law changes or if fewer than 25% of the original issue remains.
  • Redemption may occur at par ($100), even if you bought at a premium—capping upside.

🧩 7. No Voting Rights or Control

  • Holders of STRK, STRF, and STRD have no say in corporate governance.
  • You’re relying entirely on management’s decisions—especially around Bitcoin strategy and capital allocation.
Would you like a visual risk ladder or a checklist to help decide which of these fits your risk tolerance best?
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