K33 Strategy’s preferred-stock-funded Bitcoin purchases are costly, with annualized dividend expenses reaching 725000000 USD
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K33 Strategy’s preferred-stock-funded Bitcoin purchases are costly, with annualized dividends of approximately 725000000 USD。
Article
K33 Strategy’s preferred-stock-funded Bitcoin purchases are costly, with annualized dividend expenses reaching 725000000 USD
PANews October 14 According to a report by The Block,K33 research director Vetle Lunde noted that Strategy’s model of financing Bitcoin purchases through preferred stock (especially STRC) helped it add nearly 100000 Bitcoin BTC in the first half of the year, but significantly increased its cost of capital and may have been counterproductive.K33 A simulated scenario showed that if it had not used STRC financing to purchase Bitcoin in the first half of the year, Strategy’s Bitcoin holdings as of Monday would have been 843,303; its actual holdings were 848,250, an increase of only 4,947 Bitcoin BTC. Meanwhile,STRC and other preferred stock have generated approximately 725000000 USD in annualized dividend expenses. Based on the current Bitcoin price of approximately 83000 USD, this is equivalent to approximately 8,740 Bitcoin BTC in annual losses...
Key points
01
K33 Research director Vetle Lunde noted that Strategy finances Bitcoin purchases through preferred stock, particularly STRC.
02
The report said that this model helped Strategy add nearly 100000 Bitcoin BTC in the first half of the year, but significantly increased its cost of capital.
03
K33 The simulation showed that if it had not used STRC financing to purchase Bitcoin, Strategy’s BTC holdings as of Monday would have been 843303 Bitcoin; its actual holdings were 848250 Bitcoin, an increase of only 4947 Bitcoin BTC。
04
STRC and other preferred stock have generated approximately 725000000 USD in annualized dividend expenses.
05
Based on the Bitcoin price of approximately 83000 USD cited in the report, 725000000 USD is approximately equivalent to 8740 Bitcoin per year BTC。
AI-assisted interpretation
The following is analysis, separate from reported facts. Verify important claims independently.
Strategy raises funds through preferred stock to purchase Bitcoin, but must continue paying dividends.K33 estimates that this financing generated only approximately 4947 additional BTC but entailed approximately 725000000 USD in annualized dividends, meaning that financing costs may offset part of the gains from purchasing Bitcoin.
Why it matters to readers
This shows that Strategy’s Bitcoin purchases should not be assessed solely by the amount of newly added BTC; financing and dividend costs must also be considered, as high costs may increase its pressure to continue raising capital.
Preferred-stock financing is similar to raising funds first and then paying dividends as agreed. If the returns generated by the additional assets are insufficient to cover the dividends, financing efficiency will decline.
Risks and unknowns
The original text is truncated at “approximately 8740 Bitcoin BTC per year...” and does not fully explain the conclusion comparing dividend costs with the returns from additional holdings.
The report only describes a K33 simulated scenario and does not provide the complete model assumptions or calculation methodology.
The original text does not state whether Strategy will subsequently adjust the financing scale or dividend policy for STRC and other preferred stock.
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Related concepts
preferred stock
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