K33 Questions Strategy Efficiency as STRC Preferred Dividend Bill Tops $725 Million a Year

Crypto research firm K33 has raised concerns about Strategy’s use of perpetual preferred stock to fund its Bitcoin treasury, arguing that the dividend burden could offset the benefit of acquiring more Bitcoin.

BlockBeats reported on October 14 that K33 estimated annual dividend payments tied to Strategy’s perpetual preferred stock, Stride (STRC), at about $725 million. Assuming a Bitcoin price of $83,000, that would be equivalent to selling about 8,740 Bitcoin a year to fund the payout.

K33 estimated that if Strategy had purchased Bitcoin with its dollar reserves and the funds used for Stride purchases rather than issuing the preferred stock, the difference in its current holdings would be only about 4,950 Bitcoin. Given Stride’s dividend rate of about 12%, buying Bitcoin through common stock issuance would be more efficient, K33 wrote.

Strategy has issued Stride since the second half of last year and has recently used it as a key source of funding for Bitcoin purchases.