Strategy defies market trends as STRK and Bitcoin holdings surge

Strategy (formerly MicroStrategy) preferred stock, STRK, had a record-breaking performance in its first two weeks. According to the company, STRK is now the best-performing out of 115 preferred stocks listed in the US since 2022.

Per information shared on X, STRK is first in price performance with 19% more gains than the average preferred stock. It has also attracted more interest from investors, with a trading volume that is 7x the average.

The company founder, Michael Saylor, also noted the stock’s strong performance, saying:

“In the initial two weeks of trading, $STRK is the best performing and most liquid perpetual preferred security.”

The performance highlights how well investors have taken to STRK despite earlier speculations from some analysts that it could fail to meet expectations. Barron’s analyst Andrew Bary had said in January that Strategy might have to cut the price of the stock offering by 8%.

With STRK now doing better than expected, Coindesk senior analyst James Van Straten said he had contacted Barry about possibly updating his article. Another market expert noted that Barron’s take is not surprising because Wall Street underwriters usually want issuers to underprice deals so that they can appear as a big success in hindsight.

STRK is Strategy’s Series A Perpetual Strike Preferred Stock, a convertible preferred stock through which Strategy seeks to raise $250 million that will be spent on buying Bitcoin. The stock has a liquidation preference of $100 and can be converted into Class A common stock under certain conditions.

Strategy continues positive performance despite BTC decline

The performance of STRK highlights how Strategy has been performing positively this year despite Bitcoin itself struggling. The business intelligence turned Bitcoin company has seen a strong performance, with its stock up 16.61% year to date.

By comparison, Bitcoin is only up 3.42% YTD, with the flagship asset stuck below $100,000 for almost two weeks. BTC’s struggles are due to several reasons, including macroeconomic factors such as inflation and tariffs, but Strategy, which positions itself as a Bitcoin company, has not seen much negative impact.

Despite Strategy’s last two Bitcoin acquisitions costing more than BTC’s current price, investors seem to have a strong positive sentiment about Strategy’s position, which also spreads to STRK.

There are no clear reasons for this, but the company has made several moves since the start of this year that show its focus on Bitcoin acquisition without diluting shareholder value. It is also expected to start applying the FASB accounting rules by 2025 Q1, which could boost its financials.

Interestingly, the positive sentiments are not limited to Strategy but include other Bitcoin institutional investment products. Spot Bitcoin Exchange-traded funds (ETF) continue to see massive interest from institutional investors despite BTC’s current price struggles, showing how this group of investors perceive them.

For instance, Abu Dhabi sovereign wealth fund Mubadala Investment Company is BlackRock IBIT’s seventh largest known holder, with $461.23 million. Tudor Investment, the firm of legendary investor Paul Tudor James, also owns $426.9 million worth of IBIT shares.

IBIT’s performance has stood out, particularly from other Bitcoin ETFs. Since Donald Trump became president, IBIT has only had two outflows, all worth a combined $50 million.

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