Discover STRF (Strife), Strategy's Bitcoin-backed preferred stock for cautious investors, offering steady payouts and strong protections with low risk.
Timestamped Overview
[00:00:00] Phong Le reviews performance since Q1 earnings:
- BTC yield at 16.3% (target 25%), halfway met.
- BTC dollar gain at $7.7 billion (target $15 billion), outperforming other Bitcoin treasury companies.
[00:01:50] Phong Le discusses STRK (STRK) and STRF performance:
- STRK: $80 to $100, 24% gain since inception.
- STRF: $85 to $98.8 in two months, 16% gain, compared to other prefers at -5.5% and -3.8%.
- Last month: STRF +12%, STRK +17%.
[00:02:45] Phong Le explains why STRK and STRF are unique:
- Longer duration than typical prefers (5-30 years).
- Higher coupons: STRK 8%, STRF 10% vs. others at 5-7%.
- High trading volume: STRK $31M/day, STRF $23M/day vs. others at $0.4M/day.
[00:03:36] Phong Le discusses STRF ATM:
- Confidence in issuing $2.1 billion ATM due to STRF’s liquidity and demand.
- STRK ATM issued $212 million without price pressure.
- Progress on $42 billion plan: 55% complete for MSTR equity, $212M issued for STRK.
[00:05:03] Michael Saylor explains STRF’s role:
- STRF is the “crown jewel” of preferred strategy, aiming for investment-grade status.
- Targets conservative investors avoiding volatile stonks or direct Bitcoin.
- High BTC rating (6.7), expected to improve with Bitcoin’s rise and junior securities issuance.
[00:08:17] Michael Saylor outlines capital structure:
- MSTR equity: High volatility, more leverage than Bitcoin.
- STRK: Moderate volatility, appeals to “Bitcoin curious” with dividends and upside.
- STRF: Low volatility, senior-most preferred, targets risk-averse investors.
[00:10:42] Michael Saylor details ATM management:
- Three ATMs ($21B MSTR, $21B STRK, $2.1B STRF) balanced daily based on market conditions.
- Synchronized with BTC acquisitions to stay hedged, maximizing gains while managing liquidity.
[00:13:06] Michael Saylor highlights ecosystem:
- MSTR equity as a liquid, credit-worthy base for leveraged ETFs and options.
- STRF and STRK strip volatility for risk-averse investors.
- Supported by $60 billion Bitcoin reserve (576,230 BTC).
[00:15:38] Michael Saylor concludes:
- STRF ATM is part of ongoing Bitcoin strategy innovation.
- Thanks investors for support, looks forward to future updates.
Notable Quotes
BTC Yield and Gain Performance
A year to date, we're at 16.3% versus a 25% target on BTC yield, so well through the halfway mark on that particular KPI.
Phong Le @digitalphong
BTC Dollar Gain
Our BTC dollar gain... we're at $7.7 billion of BTC dollar gain year to date on a target of $15 billion.
Phong Le @digitalphong
STRF and STRK Performance
STRF plus 12% in the last month and STRK plus 17% in the last month, both of which are now approaching power value on instruments that are very unique in the market.
Phong Le @digitalphong
STRF as Crown Jewel
We see STRF as the crown jewel of our preferred strategy... our aspiration is for the market to view this as investment grade fixed income.
Michael Saylor @saylor
STRF Investor Appeal
STRF is an instrument to draw a new class of investors into the Bitcoin universe that otherwise they wouldn't buy Bitcoin, they wouldn't buy a highly volatile stonk.
Michael Saylor @saylor
STRK's Unique Appeal
STRK... it's for the Bitcoin curious or the crypto curious, think of it as like a Bitcoin fellowship that comes with a living stipend.
Michael Saylor @saylor
Capital Structure Strategy
Our goal with STRF is really to focus upon stripping away the volatility and provide the highest degree of seniority we can.
Michael Saylor @saylor
Transcript
Phong Le [00:00:00]: Hello, good morning, welcome everybody. I’m joined here with our executive chairman and founder, Michael Saylor. I’m Phong Le, the CEO, president of Strategy. And we’re here today to announce our $2 .1 billion STRF (Strife) ATM shelf registration. The strength of a good first half of the year and good performance from our fixed income equities, Strike and STRF. I’ll start with just a performance review since we last talked with our Q1 earnings call at the beginning of May. And since updating our BTC yield and BTC gain targets for the year, we’ve seen a substantial accretion on both of those. A year to date, we’re at 16 .3 % versus a 25 % target on BTC yield, so well through the halfway mark on that particular KPI. And even more substantial, more important, our BTC dollar gain, which in many ways is an analogy to a earnings number for a traditional company. We’re at $7 .7 billion of BTC dollar gain year to date on a target of $15 billion. And that is far and away, higher than any other Bitcoin treasury company and higher than many other traditional companies out in the market today. If we look at Strike and STRF and the performance since inception, we’ve seen Strike go from $80 initial pricing to nearly $100, 24 % gain during that period of time. And we’ve seen STRF out in the market for a little bit less than two months, initially priced
Phong Le [00:01:50]: $85 and now at $98 .8, and that’s a 16 % improvement since launch. And that compares to other prefers that have been in the market for a similar period of time at negative 5 .5 % and negative 3 .8 % respectively. So we’ve been very happy with the performance in Strike and STRF since we rolled these out in the first quarter of 2025. If you zoom into the last month, the performance has been even more impressive. STRF plus 12 % in the last month and Strike plus 17 % in the last month, both of which are now approaching power value on instruments that are very unique in the market. So let me talk a little bit more about why these are unique instruments, right? You’re all aware that the duration of Strike and STRF are
Phong Le [00:02:45]: compared to other prefers, which have anywhere between a five and 30 year duration. These are infinitely longer in duration. And the coupons that we’re paying on Strike and STRF are eight and 10 % respectively compared to other prefers, which are five to 7%. What I say that is also quite interesting, in addition to the performance, is we’re seeing significant trading volume, $31 million a day for Strike, $23 million a day for STRF compared to $0 .4 million. So call it 62X and 46X more trading with both of these instruments. So we’re getting both performance, we’re getting a perpetual nature duration, you’re getting a higher coupon and significant liquidity in both of these. And I
Phong Le [00:03:36]: it’s that liquidity that gives us the confidence that we can now issue an ATM against STRF. The other thing that I’ll note is with the ATM on Strike, we’ve been able to issue now $212 million on that ATM. And we’ve been doing it in an orderly fashion that hasn’t put pressure on the price, and we’ve done it in a liquid market. And what that means, big picture, is against our 42 -42 plan that we’ve announced on the MSTR equity, we now are at 55 % against
Phong Le [00:04:11]: We’re
Phong Le [00:04:11]: a $42 billion plan. So we’ve issued about $2 billion more since we’ve issued our next shelf registration for MSTR. On STRK, we’re able to issue $212 million against a $21 million plan. And now with STRF, as we see the liquidity in the market and we see the demand in the market for our instrument, we have confidence that a $2 .1 billion ATM is something that we can also execute upon going forward. And we’re excited to see STRF start to continue to perform like Strike and also be able to help us fill our fixed income objective of the $42 billion. So with that, I’ll hand it over to Mike to talk more about some of these instruments and how we think about our overall capital structure.
Michael Saylor [00:05:03]: Thanks, Phong. You know, the question that pops to mind is why 2 .1 billion instead of 21 billion? And the answer is we see STRF as the crown jewel of our preferred strategy. We’re gonna be 10 times as choosy and 10 times as careful about this instrument because our long -term goal with this instrument is for this to be deemed as the pristine fixed income preferred stonk in the market. Our aspiration is for the market to view this as investment grade fixed income. It’s got the highest BTC rating of our preferreds, it’s like 6 .7 now, but our plan will be to drive that rating up.
Michael Saylor [00:05:52]: know, we expect that rating will go up over time as Bitcoin goes up, we expect that rating will go up over time as some of the senior securities to this instrument equitize, and we would expect that rating to go up because we’ll be biased toward issuing more securities that are junior to this instrument that will improve the credit quality of this. And of course, I think that as the market becomes more comfortable with Bitcoin and more comfortable with our preferred strategy, they’ll start to see just how good these instruments are and they’ll start to see that STRF is a extremely over -collateralized, well -constructed instrument, and it will appeal to the most conservative fixed income investors, the ones that want super high quality security and investor protections and payment protection features. So STRF is an instrument to draw a new class of investors into the Bitcoin universe that otherwise they wouldn’t buy Bitcoin, they wouldn’t buy a highly volatile stonk, they wouldn’t buy a convertible bond or a convert, but this is something that will start to check the box for them and meet their investor requirements. Strike on the other hand, it’s for the Bitcoin curious or the crypto curious, think of it as like a Bitcoin fellowship that comes with a living stipend. You’re gonna get a chance to learn about Bitcoin, you get the upside of Bitcoin, you can take your time, you can hold it for a decade or two decades, and you get the upside of Bitcoin via that conversion rate, but you also get the quarterly dividend and it’s a strong dividend and you get this over -collateralization as well. So we think this is a really great instrument to onboard new classes of investors, maybe investors that would otherwise invest in the S &P index or maybe they think that Bitcoin might be just a little bit too much of a roller coaster for them and they like the downside protection or the liquidation preference. So Strike,
Michael Saylor [00:08:17]: pairs very nicely with STRF and it sits right in the middle of that capital structure below MSTR and it’s worthwhile for us to take a look at that capital structure right now. You can see we generate a lot of volatility by design with the equity, our goal for MSTR equity is to make it more volatile, more leverage than Bitcoin. Our goal with Strike is to sit right in the middle, some volatility, some leverage, and our goal with STRF is really to focus upon stripping away the volatility and provide the highest degree of seniority we can. We won’t issue any more preferred senior to STRF. STRF will be the senior jewel in the crown for our company and we expect to go to all manner of investors and use this as our door opener to bring them into the entire strategy ecosystem. But I think I get a lot of questions all the time about, well, how do you run the ATM? And I think the important thing to note is that with this $2 .1 billion shelf registration, we will now have a $21 billion Strike program, a $21 billion MSTR program, a $2 .1 billion STRF program. All of those very artfully engineered and balanced to work together. And we as a company actively manage these. So on a daily basis, we’re rebalancing and programming these ATMs based upon the capital markets, the volatility of Bitcoin, what’s going on in the macro economy and the feedback of investors. And we’ve got a whole set of signals that we use in order to do that rebalancing. After we’ve rebalanced those parameters, we’re executing these ATMs minute by minute. And so it’s a fairly intricate and elegant machine. And as we’re executing the ATMs, we’re synchronizing our BTC acquisition in order to stay hedged.
Michael Saylor [00:10:42]: so it’s a fairly elegant machine and it’s a very scalable machine. And the goal is to continuously generate yield and continuously generate BTC gain and maximize the BTC gains that we’re able to generate while trading off against liquidity and market dynamics and pricing. There’ll be times when all of these ATMs will be turned off. There’ll be times when one of them is working or two of them or all three of them are working. The fact that we have all three gives us extraordinary optionality to do the right thing for the shareholders. And I’ll end with this slide, which is to just show how far we’ve come since the end of October last year. We have now managed to build a very thriving ecosystem of Bitcoin -based and Bitcoin -linked securities that are, for the most part, built on top of MSTR equity. And so what you can see is that for those people in the TradFi market that just wants straight one -for -one Bitcoin performance involved, they’re buying the spot Bitcoin ETFs. But MSTR equity is more levered and more volatile and it’s become very liquid. And because it is very liquid, very well -known global and more volatile, and also because it’s an operating company, it turns out to be more compliant and a bit more creditable, credit -worthy than spot ETFs. A lot of people can’t trade the ETFs. They can’t actually get credit lines against them. They’re not quite compliant. The most compliant security globally is generally a well -known seasoned issuer and an equity from an operating company. So we have that pristine equity collateral, and that is then a building block, a component. It’s going into highly levered ETFs like MSTX, MSTU, MSTZ. There are billions and billions of dollars of capital in those,
Michael Saylor [00:13:06]: 2X levered MSTR type instruments. And of course, MSTR equity is the base collateral for the entire options market built on MSTR, which has an open interest that ranges from 60, 70, 80, 90, even up to a hundred billion dollars at times. And that meets the requirements of traders above the baseline. Then below the baseline of a spot ETF, there are a lot of investors that want to strip the volatility, strip the risk, and strip the leverage off of their securities. And so of course we have MSTR convertible bonds that meet that requirement. We have ETFs like BMACs that provide a simple investor access to those convertible bond markets. And the converts are over the counter traded. So BMACs is an instrument that you can use if you were a retail investor. Or you weren’t a qualified institutional buyer. We’ve talked about Strike and STRF, which are two very innovative preferred stonks that strip volatility and leverage, and they strip some of the risk. And then of course, there’s another rapidly growing class of ETFs, the high yield income generators like MISTI, which is the other day was up to about $4 billion of capital getting to be very large. And IMIST and MST, there are various flavors. They’re selling various types of volatility. And I think MST is like half leverage, half volatility. But I think we’re pretty proud that we have been able to provide a framework for a rapidly growing ecosystem that offers all types of investors, all types of Bitcoin exposure that they might need in order to meet their charter or meet their investment objectives. And of course, the foundation of all of this is the 576 ,230 Bitcoin in our Bitcoin reserve. That’s worth about $60 billion right now. And because that’s permanent capital, that provides the baseline to create this high performance, credit worthy set of securities.
Michael Saylor [00:15:38]: we’re gonna continue to pioneer new forms of Bitcoin BTC equity and new forms of BTC credit that meet the needs of various capital markets investors. Our announcement today of this STRF $2 .1 billion ATM is simply the latest in our Bitcoin strategy. We appreciate your support. We couldn’t do it without you. And I thank you for your time today and look forward to speaking with you all soon.