Perpetual Preferred Shares: Debt Restructuring Strategy with Seniority is Saylor's Solution Foundation

Strive (ASST) has come up with an unprecedented financial formula to overcome the burden of long-term convertible debt: turning it into perpetual preferred stock that pays high dividends. This revolutionary approach now opens the door for MicroStrategy to settle CEO Michael Saylor’s $8.3 billion mountain of convertible debt. This strategy is not just an accounting trick—but a fundamental reorganization in how companies can manage long-term financial obligations with unprecedented flexibility.

How the Perpetual Preferred Equity Structure Changed the Restructuring Game

Instead of pursuing traditional refinancing or debt extensions at maturity, Strive chose a different path: converting bonds with fixed maturity dates into preferred equity instruments that have no time limits. Its offering for Tier A Variable Perpetual Preferred Stock (SATA) has increased beyond its initial target, attracting more than $150 million in funding with a price tag of $90 per share.

The transaction includes the issuance of up to 2.25 million aggregate shares, combining a public offering with a private debt exchange. By leveraging this dual-track approach, Strive creates a payline that reduces direct cash expenses while providing long-time bondholders with more attractive yields.

SATA: High Dividends with no Maturity Burden to Fill the Debt Hole

The distinguishing feature of SATA is simple yet powerful: the variable dividend is currently set at 12.25% per annum, with no mandatory conversion feature and no maturity date at all. These instruments are accountably treated as equity, not debt—a classification that significantly increases the company’s leverage profile in the eyes of investors and creditors.

For long-time bondholders, this swap offers an attractive trade-off: they give up their equity conversion options in exchange for instruments that provide higher yields, are perpetual, are fully liquid, and most importantly—have seniority over common stocks. As a result, they maintain payment priority over general shareholders while enjoying a continuous stream of revenue.

Why Seniority is a Decisive Element in Preferred Equity Offerings

Seniority is the factor that makes this entire structure work. In the company’s claims hierarchy, seniority is the position that determines the order of payments in a financial distress or liquidation scenario. Preferred shareholders with seniority over common stock have the assurance that their claims will be prioritized if the company’s assets are to be distributed.

This is why Semler Scientific’s bondholders—which represent $90 million of aggregate principal—are willing to swap their convertible debt positions for SATA’s structure. Although it does not have a definite maturity date, the security that comes from seniority is that it is a psychological and financial compensation that is sufficient to overcome perpetual uncertainty.

The net proceeds from SATA’s offering are planned to pay off Semler Scientific’s Convertible Senior Notes at a rate of 4.25% guaranteed by Strive and mature in 2030. Approximately 930,000 newly issued SATA shares will be exchanged directly for convertible bonds, with the remaining funds from the offering, along with available cash, used to redeem Semler’s remaining convertible bonds as well as repay Coinbase’s credit facility loans.

The Path Open for MicroStrategy: Saylor’s Strategy Application for $8.3 Billion in Debt

Strive success in this execution opens up a bigger question: can Michael Saylor apply the same template to address a much larger convertible debt position in MicroStrategy (MSTR)?

MicroStrategy carries a convertible load of $8.3 billion overall. The largest part of this obligation is a $3 billion tranche with a put date of June 2, 2028 and a conversion price of $672.40—well above the current share price of around $160. This means that the possibility of forced conversions is still a long way off, but the approaching maturity poses a real risk of refinancing.

The same preferred perpetual strategy can be applied. MicroStrategy can issue perpetual preferred shares with a competitive structure and dividend yield, then use the proceeds to exchange convertible bonds that will mature. With seniority is a security structure that allows investors to receive instruments without deadlines, bondholders will get fixed yields and long-term stability—while Saylor frees the balance sheet from the risk of pending maturity.

The market value of MicroStrategy’s perpetual preferred stock has exceeded the face value of convertible bonds in some cases, indicating that the market believes in the value proposition of these instruments. With Bitcoin’s strengthening positioning in micro-strategy portfolios, the demand for perpetual equity with competitive yields will continue to be strong.

This method not only solves short-term debt problems, but also sets up healthier financing fundamentals for decades to come—a legacy that will surely be Saylor’s financial legacy if this strategy succeeds at full scale.