Great questions — you're asking exactly the right things before getting into a convertible preferred like STRK (MicroStrategy’s 8.00% Series A Preferred). Let’s break it down in plain English:

🔁 1. Is the Conversion to MSTR Automatic at $1,000?🔁 1. Is the Conversion to MSTR Automatic at $1,000?

No. The conversion is not automatic when MSTR hits $1,000 per share.

• The $1,000 price point is just the point where converting 1 STRK (worth $100 in liquidation preference) into 0.1 shares of MSTR becomes mathematically break-even.
• But you must manually initiate the conversion, and even then:
  • You can only convert during specific periods (typically the last month of each calendar quarter, like March, June, September, or December).
  • You must convert in amounts sufficient to receive at least 1 whole share of MSTR (i.e., 10 STRK minimum unless converting your entire position).

🛠️ 2. What Is the Actual Process to Convert STRK?🛠️ 2. What Is the Actual Process to Convert STRK?

1. Monitor MSTR price – when it’s near or over $1,000, conversion might make sense.
2. Wait for a valid conversion window (usually the last month of the quarter).
3. Contact your broker (Schwab, Fidelity, etc.) — they’ll either:
   • Give you a form to sign, or
   • Route it through their corporate actions desk.
4. You’ll receive MSTR shares in your account within 1–2 business days (plus cash for any fractional shares).

💰 3. Will This Trigger Taxes?💰 3. Will This Trigger Taxes?

Here’s where it gets a bit nuanced.

• If you’re converting STRK into MSTR, it may or may not be a taxable event depending on IRS treatment.
• Usually, a conversion like this is considered a "non-taxable exchange" (like swapping one form of equity for another under IRC §368).
• If it's non-taxable:
  • Your cost basis in STRK becomes your basis in MSTR.
  • Your holding period carries over.
• But if the IRS deems it taxable (unlikely for voluntary conversions unless accompanied by other gains/losses), you’d recognize a capital gain or loss at time of conversion.

👉 Best move: Check with a CPA, especially if you’re converting a large amount.

🧭 4. Summary — What You Should Know🧭 4. Summary — What You Should Know

✅ Should You Still Buy STRK?✅ Should You Still Buy STRK?

It depends on your comfort level:

• STRK is great for income (8% yield) and has upside if MSTR rallies.
• But it's not for “set it and forget it” investors. You need to:
  • Track MSTR price,
  • Understand the conversion process,
  • Possibly talk to your broker and accountant.

If you're okay with a little complexity and want high yield + upside, STRK can be smart. Otherwise, just buying MSTR directly may be simpler.

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