Michael Saylor: Preferred Stocks and Bitcoin as the Basis for New Financial Instruments

Strategy CEO Michael Saylor explained that preferred shares are becoming an important element in building new financial models. Unlike common securities, they are closer to bonds and offer investors a fixed income. Such shares may include cumulative dividends, conversion rights, and liquidation benefits. This makes them a convenient tool for long-term investing and stable payouts.

Companies can issue various types of preferred shares, which, depending on their terms, resemble either securities or debt instruments. Public companies list them on the exchange, allowing for the creation of private ETFs. One advantage is the ability to integrate with Bitcoin, which can act as collateral for such instruments.

Digital credit products are being created on this foundation. They can be secured by 10x collateral and generate approximately 10% dividends, paid in perpetuity. Examples include Strike, which pays 8% and is convertible into Strategy shares; STRIFE, a 100-year bond yielding 10%; and Stride, a long-term employee loan yielding 12.7%.

Such instruments benefit both investors and institutions. The former receive a high rate of return by trusting the brand and Bitcoin. Companies can use them as collateral for new loans, which increases capitalization and transaction volume. This approach fosters trust in businesses and the IEC itself.

Leveraging allows companies to buy Bitcoin without significant credit risk. An example is a $100 billion transaction using 90% leverage. This strengthens the position of both BTC and the companies issuing such instruments. Increased liquidity and capital management flexibility become key advantages.

Source: cryptonews.net