DEFINITION
A share class that pays a set dividend instead of upside, ranking above common stock but below bonds if the company fails. In bitcoin markets, it's how treasury companies turn volatile coins into "fixed income."
Preferred shareholders trade growth for priority: they receive their dividend before common shareholders see anything, and in a liquidation they're paid before common — but after every bondholder. Terms vary widely: cumulative preferreds accrue missed dividends as debt owed; non-cumulative ones simply skip them. Convertible preferreds add an option to swap into common stock at a set price.
Strategy made preferred stock a bitcoin instrument at scale, issuing four series — STRF, STRC, STRK, and STRD, roughly $15.5 billion notional — whose dividends are ultimately backed by the company's bitcoin stack and its ability to keep raising capital. Each sits at a different rung of risk and yield, forming what Michael Saylor calls a "bitcoin yield curve."
Key facts
Payment priorityBonds → preferred → common
Strategy's seriesSTRF, STRC, STRK, STRD
Key distinctionCumulative vs non-cumulative