Saylor: Digital credit could be next billion-dollar market

Michael Saylor, executive chairman of Strategy Inc., urged entrepreneurs and investors on Aug. 7 to study digital credit, drawing attention to the company’s listed preferred securities that show double-digit effective yields.

He posted on X a chart showing effective yields as of 11:10 a.m. EDT for four securities: Stride Preferred Stock (STRD) 15.29%, Stretch Preferred Stock (STRC) 12.63%, Strike Preferred Stock (STRK) 12.08% and Strife Preferred Stock (STRF) 10.38%.

Strategy Inc., which trades on Nasdaq under the ticker MSTR, has packaged several preferred-stock instruments and labeled them digital credit. One example, STRC, is a perpetual preferred security with a variable dividend rate that allows the company to change distributions while offering investors an income-oriented instrument.

The preferred securities provide Strategy with financing options beyond issuing common stock or taking traditional debt and place dividend obligations at different levels in the company’s capital structure.

The securities are not collateralized by Strategy’s bitcoin holdings. The company has sold bitcoin at times to fund preferred dividends and to build its U.S. dollar reserve, supplying cash liquidity for those payments.

Saylor called the group a ‘digital credit stack’ and described the approach as applying familiar credit-market structures to companies with bitcoin-centered treasuries. The model links issuers seeking capital with investors seeking yield through listed income products while allowing issuers to retain exposure to digital assets on their balance sheets without requiring investors to hold those assets directly.

Investor interest in Strategy’s preferred securities has increased as the company adds offerings with different yield and risk profiles. The company has said the lineup could be scaled across additional offerings if market demand continues.