727 FinancePANews October 14 news, according to The Block, K33 research head Vetle Lunde pointed out that Strategy's model of financing Bitcoin purchases through preferred stock (especially STRC), although it helped increase holdings by nearly 100,000 BTC in the first half of the year, significantly raised the cost of capital and may not be worth the cost.
K33's simulated scenario shows that if STRC financing had not been used to buy Bitcoin in the first half, Strategy's Bitcoin holdings as of Monday would have been 843,303 BTC, while actual holdings were 848,250 BTC, an increase of only 4,947 BTC. At the same time, STRC and other preferred stock have brought about $725 million in annualized dividend expenses. At the current Bitcoin price of about $83,000, this is equivalent to a cost of about 8,740 BTC per year. K33 believes that the preferred stock model adds complexity to what was originally a simple capital structure.