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Strategy, the company renamed from MicroStrategy in 2025, raises cash and then deploys it into bitcoin. Its funding mix is excess cash, common-stock at-the-market (ATM) sales, convertible senior notes, preferred-stock offerings and preferred-stock ATMs. The company’s 2026 Form 10-K says it bought $22.47 billion of bitcoin during 2025, using proceeds from 2030B convertible notes, preferred-stock IPOs and ATMs, and class A common-stock ATMs. It bought $22.07 billion during 2024 with convertible-note proceeds, common-stock ATM proceeds and excess cash.
That structure lets Strategy increase its bitcoin holdings without relying on operating cash flow alone, but it creates obligations and risks for shareholders: common-stock issuance expands the share count immediately, convertible debt can become stock or require repayment, and preferred securities rank ahead of common equity while demanding dividends.
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Where the money comes from
Strategy describes bitcoin as part of its treasury-reserve policy. It first can use liquid assets that exceed working-capital needs, then raises additional capital when market conditions permit. The company’s stated approach is to issue debt or equity securities, or complete other capital-raising transactions, with the objective of buying bitcoin.
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Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →| Funding channel | How cash is raised | Primary effect on common shareholders | Cash or legal claim created |
|---|---|---|---|
| Excess cash | Operating cash flow and liquid assets above working-capital requirements | No new shares by itself | Reduces liquid reserves that could otherwise fund operations or obligations |
| Class A common-stock ATM | New shares sold through agents at prevailing market prices over time | Immediate increase in shares outstanding | No scheduled interest, but proceeds depend on the trading price and market demand |
| Convertible senior notes | Investors lend money in exchange for debt securities that may be convertible into common stock | Potential dilution on conversion; assumed conversion can affect diluted-share measures before conversion | Interest and principal repayment or refinancing if notes do not convert |
| Preferred-stock IPOs and ATMs | Preferred securities sold in public offerings or gradually through an ATM | Usually not the same immediate common-share increase as a common ATM, subject to each security’s terms | Dividend obligations and a senior claim ahead of class A common stock |
The mix can change from one quarter to the next. A bitcoin purchase announcement therefore does not mean that all of the cash came from one type of borrowing or one stock sale.
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How a common-stock ATM finances bitcoin
An ATM program authorizes sales agents to place newly issued class A shares into the public market at then-current prices. Strategy does not have to sell the entire authorization at once. It can choose the timing and amount, allowing it to raise capital during periods of strong share-market demand.
A November 11, 2024 filing illustrates the mechanics. Strategy said it had sold 7,854,647 shares for approximately $2.03 billion in net proceeds under an August $2 billion ATM and an October $21 billion ATM. It said those proceeds funded 27,200 bitcoin purchased between October 31 and November 10, 2024, at an average price of $74,463 per bitcoin.
The trade-off is arithmetic: the company receives cash and adds bitcoin, but the number of common shares rises. Existing holders own a smaller percentage of the company unless the bitcoin acquired and the market value attributed to it grow sufficiently to offset that increase. The effect depends on the sale price, bitcoin purchase price, fees, and the share count used for the relevant performance measure.
What to check in an ATM announcement
- The number of shares sold and the net cash received, rather than the gross authorization alone.
- The average issuance price, because selling at a higher price generally raises more cash per new share.
- The period covered by the sales and bitcoin purchases; an authorization can remain open long after a particular purchase.
- Whether some proceeds were reserved for interest, preferred dividends, operating needs or a USD Reserve instead of bitcoin.
How convertible senior notes work
Convertible notes combine debt financing with a possible future equity issuance. Investors provide cash up front. Until conversion or maturity, Strategy has a debt obligation and typically pays interest according to the note terms. If conversion conditions are met and holders elect or are required to convert under those terms, the debt can be settled with common shares, creating dilution.
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Strategy’s 2024 filing reported $6.13 billion of net proceeds from its 2028, 2029, 2030A, 2031 and 2032 convertible notes. The company said it principally used those proceeds to acquire bitcoin and used part of the 2028-note proceeds to redeem secured notes. “Net proceeds” means fees and other issuance costs have already been deducted from the stated amount.
Conversion risk exists even before a noteholder receives shares. Strategy includes assumed conversion in the diluted-share calculation used for its BTC Yield metric. That accounting and performance presentation can make the denominator larger than the basic shares outstanding, so investors should distinguish basic shares, diluted shares and the specific assumptions used in each release.
Why a convertible is not free equity
- Interest: Cash interest is a recurring requirement disclosed with the debt instruments.
- Maturity: If notes remain outstanding, principal must be paid or refinanced at maturity. A note that does not convert does not disappear merely because bitcoin prices rose.
- Conversion dilution: Conversion can add common shares, transferring part of the company’s future value to noteholders.
- Priority: Debt claims rank ahead of common equity in a liquidation, subject to the legal terms and any collateral arrangements.
The company’s 2025 purchases included proceeds from a 2030B convertible-note issue. The 2026 Form 10-K groups those proceeds with preferred-stock IPO and ATM proceeds and class A common-stock ATM proceeds as sources for the year’s $22.47 billion of bitcoin purchases.
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Preferred securities let Strategy raise capital without the same assumed-diluted-common-share increase associated with issuing ordinary class A shares. They are not costless: preferred holders generally receive stated dividends and rank senior to class A common stock. The filing also notes that preferred securities can have claims on bitcoin and other assets if the company is liquidated.
Strategy expanded this channel in 2025. Its 2026 Form 10-K attributes $5.69 billion of capital-markets proceeds to STRF, STRC and STRD offerings and ATMs. A further $19.46 billion came from STRK and class A common-stock ATMs, the 2030B notes and the STRK IPO. Together, total capital-markets proceeds were $25.15 billion for 2025.
Preferred-stock ATMs operate like common ATMs in one respect: securities are sold over time through agents instead of all at once. Their economic terms differ, however. Investors must read the dividend rate, payment conditions, redemption provisions, conversion or exchange features, and ranking for the specific series. A preferred issue may avoid immediate common dilution while still reducing the cash available to common holders because dividends are paid before common distributions.
Common stock versus preferred stock
| Question | Class A common ATM | Preferred offering or ATM |
|---|---|---|
| Does the basic common-share count rise when sold? | Yes | Not in the same direct way, unless the security’s terms later result in common shares |
| Who is paid first in a liquidation? | Common holders are junior | Preferred holders rank ahead of class A common stock |
| Is there a dividend claim? | No stated preferred dividend | Yes, according to the particular series’ terms |
| Can the security affect per-share analysis before common issuance? | Through the actual increase in shares | Through senior claims, dividends and any assumed dilution required by the terms or metric |
How much bitcoin the program has funded
The company’s reported annual figures show the scale of the capital recycling. Strategy purchased $22.07 billion of bitcoin in 2024 and $22.47 billion in 2025. The sources were not identical in the two years.
| Year and filing | Bitcoin purchased | Funding sources identified by the company | Additional holding information |
|---|---|---|---|
| 2024, reported in the 2026 Form 10-K | $22.07 billion | 2028, 2029, 2030A, 2031 and 2032 convertible-note proceeds; class A common-stock ATM proceeds; excess cash | 2024 convertible notes generated $6.13 billion of net proceeds |
| 2025, reported in the 2026 Form 10-K | $22.47 billion | 2030B convertible-note proceeds; preferred-stock IPO proceeds; preferred-stock ATM proceeds; class A common-stock ATM proceeds | 225,030 BTC acquired during 2025; 672,500 BTC held at December 31, 2025 |
The dollar totals are acquisition spending, not a promise that the company paid one uniform bitcoin price. Purchases occur on different dates and at different market prices. Likewise, total capital-markets proceeds are broader than bitcoin spending because Strategy reports using equity proceeds for interest, preferred dividends and its USD Reserve as well as for acquisitions.
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What BTC Yield measures—and what it does not
Strategy uses BTC Yield as a key performance indicator for its bitcoin-acquisition strategy. In practical terms, it measures the change in bitcoin holdings relative to an assumed diluted share count. The company says the metric is intended to help assess whether its financing and purchases are accretive to shareholders.
A higher BTC Yield can result when bitcoin holdings grow faster than the assumed diluted shares. That comparison is different from a shareholder’s total return. BTC Yield does not by itself capture the market price of Strategy shares, interest expense, preferred dividends, taxes, operating costs, debt maturities or the premium or discount at which the stock trades to the value of its bitcoin and other assets.
A simple way to interpret the metric
- Start with the company’s reported bitcoin holdings at the beginning and end of the period.
- Use the assumed diluted-share figure defined in the same release or filing, not an unrelated basic-share count.
- Compare the percentage change in bitcoin per assumed diluted share with the change in Strategy’s share price and with bitcoin’s market-price change.
- Review the cash obligations created by the financing that produced the increase.
This approach prevents a large bitcoin purchase from being treated as automatically accretive. The purchase must be considered alongside the securities issued and the obligations attached to them.
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What happens to MSTR (Strategy) shareholders
Shareholder outcomes depend on the financing instrument, issuance price, bitcoin price and the company’s ability to refinance or meet payments. The main effects are distinct rather than interchangeable.
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| Event | Immediate effect | Longer-term issue for common holders |
|---|---|---|
| Class A shares sold through an ATM | More common shares and more cash | Ownership percentage and per-share exposure can be diluted; accretion depends on the bitcoin acquired per new share |
| Convertible notes issued | Cash increases and debt increases | Interest and maturity payments apply; conversion can create future common dilution |
| Preferred securities issued | Cash increases without the same immediate basic-share increase | Preferred dividends reduce residual cash flow, and preferred claims rank ahead of common equity |
| Bitcoin purchased with excess cash | Bitcoin holdings increase while liquid reserves decline | Less cash may be available for operations, obligations or downturns in the bitcoin market |
In a liquidation, senior debt and preferred claims are ahead of common equity. The company’s filings explicitly identify those senior claims and payment obligations. The practical sensitivity to financing-market access follows from the structure: if the share price falls, demand for new securities weakens, or refinancing markets close, continuing the purchase program can become more expensive or less available.
Key risks to evaluate before treating the strategy as a perpetual buying machine
Bitcoin-price risk
Bitcoin is volatile. A decline can reduce the market value of the treasury while interest, principal and preferred-dividend obligations continue. Accounting presentation and market valuation can also diverge, so reported holdings do not guarantee an equal increase in common-share value.
Share-price and issuance-price risk
ATM programs raise fewer dollars per share when Strategy’s stock trades at a lower price. Selling large quantities into a weak market can require more shares to fund the same bitcoin purchase, increasing dilution.
Refinancing and maturity risk
Convertible notes mature on their stated dates unless converted, repaid or refinanced. A company that repeatedly relies on new securities must maintain access to investors under acceptable terms. The filings disclose the maturities and payment requirements; the future availability and price of refinancing are uncertain.
Priority and cash-drain risk
Interest and preferred dividends are cash requirements. Because the company has used equity proceeds for those obligations and its USD Reserve, headline capital raised should not be assumed to equal bitcoin bought.
Collateral and documentation risk
Debt and preferred instruments can have different collateral, covenants, redemption rights and liquidation provisions. Those details vary by series. Read the relevant note or offering document rather than applying the terms of one security to every other instrument.
How to read the next purchase announcement
- Identify the instrument: Determine whether the cash came from common stock, a named convertible series, a preferred series or existing cash.
- Separate authorization from execution: An ATM capacity is not cash raised. Look for shares or preferred units actually sold and the net proceeds received.
- Reconcile uses of proceeds: Check how much went to bitcoin and how much went to debt redemption, interest, dividends, reserves or corporate purposes.
- Update the capital structure: Add common shares issued, potential conversion shares, preferred securities outstanding and upcoming maturities.
- Check per-share accretion: Compare bitcoin holdings with the assumed diluted-share count used for BTC Yield.
- Stress-test obligations: Consider a lower bitcoin price, a lower Strategy share price and unavailable refinancing at each maturity.
Strategy’s model is therefore a capital-markets system: raise cash, buy bitcoin, measure bitcoin per assumed diluted share and repeat when market conditions allow. The benefit to common shareholders depends on whether the additional bitcoin exposure and any resulting BTC Yield improvement outweigh dilution, financing costs, senior claims and the risks of maintaining access to debt and equity markets.
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