On February 12, Strategy CEO Phong Le stated during a Bloomberg live broadcast that Strategy will begin to gradually reduce equity financing. According to BlockBeats, Strategy will use preferred stock financing to fund its increased holdings of BTC.
Equity financing dilutes the shareholding ratio and earnings per share of existing shareholders, especially amplifying losses when Bitcoin declines. Preferred stock financing provides fixed dividend priority, does not dilute control and voting rights of common stock, and attracts conservative investors. Strategy's shift to preferred stock financing aims to continue buying Bitcoin during periods of market volatility while reducing dilution pressure on common shareholders.
