TL;DR
- K33 questioned Strategy’s use of STRC preferred shares to finance Bitcoin purchases, citing the rising cost of dividend payments.
- The research firm estimates that STRC added $725 million to Strategy’s annual dividend obligations, equivalent to approximately 8,740 BTC.
- According to its calculations, Strategy would have accumulated 843,303 BTC without relying primarily on STRC, just 4,947 BTC fewer than its actual holdings.
K33 questioned Strategy’s financing strategy involving STRC preferred shares, arguing that the associated dividend payments could outweigh the benefits of the additional Bitcoin purchases funded through the instrument.
In a report, Vetle Lunde, Head of Research at K33, calculated that Strategy would have accumulated approximately 843,303 BTC as of October 12 if it had used an alternative financing model.
The company held 848,250 BTC on that date, a difference of just 4,947 BTC compared with the research firm’s hypothetical scenario.
Although STRC helped finance the acquisition of nearly 100,000 BTC during the first half of 2026, K33 argues that dividend costs could eventually erase that advantage.
K33 Estimates an Additional $725 Million in Annual Costs
According to the report, Strategy’s annual preferred stock dividend obligations increased from approximately $830 million to $1.56 billion during 2026.
K33 attributes $725 million of that increase to the expansion of STRC, an instrument that allowed the company to raise capital for Bitcoin purchases without issuing additional MSTR common shares.
With Bitcoin trading near $83,000, that additional cost is equivalent to approximately 8,740 BTC annually.
Lunde estimates that the accumulated payments could exceed the 4,947 BTC difference between Strategy’s actual holdings and his alternative scenario in approximately seven months.
To make the comparison, K33 removed the approximately $7.5 billion raised through STRC during the first half of the year from its calculations.
It then assumed that Strategy would have used the $4 billion allocated to dollar reserves between May and August, along with another $1.6 billion spent on STRC buybacks, to purchase Bitcoin instead.
The model also assumes that Strategy would have avoided 90% of the dividend payments associated with STRC and used those savings to acquire BTC. MSTR common stock issuance remained unchanged.
Cash Reserves Reduce the Risk of Bitcoin Sales
K33 acknowledges that Strategy’s dollar reserves provide protection against its financial obligations.
According to its estimates, the company has enough cash to cover approximately 42 months of dividend payments, reducing the likelihood that it would need to sell Bitcoin to meet those obligations.
However, Lunde questioned the cost of maintaining substantial cash reserves while the company pays high dividends on its preferred shares.
The analyst used an assumed 4% return on dollar reserves, compared with a 12% dividend rate on STRC, and argued that issuing common shares could be a more efficient way to finance future Bitcoin purchases.
Strategy has also repurchased substantial amounts of STRC in recent weeks. The preferred stock closed on October 13 at $99.90, slightly below its $100 par value.
In September, the company proposed changing the dividend payment frequency for STRC, STRD, STRF, and STRK to daily distributions.
The proposal still requires shareholder approval. Strategy said the change would not increase its regular dividend obligations.
