How Perpetual Preferred Shares Could Solve Michael Saylor's Convertible Bond Problem

The crypto industry is currently experimenting with innovative financing structures to revolutionize classic debt management strategies. One promising approach is the conversion of convertible bonds into perpetual preferred shares, a strategy that could provide breakthrough solutions for MSTR and its founder, Michael Saylor. While traditional refinancing only shifts debt risk, this model opens up a completely new path to long-term balance sheet stability.

Strive’s flagship model: Replace convertible bonds with perpetual preferred shares

The company Strive (ASST), which focuses on Bitcoin treasury and asset management, demonstrated a groundbreaking strategy in January. The Company increased its post-placement offer for its Series A perpetual perpetual preferred shares, SATA, to over $150 million, with each share being offered at a price of $90. This was part of a comprehensive debt restructuring plan.

Strive’s approach differs fundamentally from traditional debt management: instead of extending or refinancing outstanding convertible bonds, they are converted directly into preferred shares. The financing made it possible to redeem Semler Scientific’s 4.25% convertible notes due 2030. Pursuant to agreements with certain bondholders, approximately 930,000 SATA shares will be exchanged directly for convertible bonds with a nominal value of $90 million. The remaining funds are to be used for further convertible bond repayments, the repayment of loans and additional Bitcoin purchases.

The attractive design for both sides: Why this convertible bond conversion works

The new SATA preferred shares currently carry a variable dividend yield of 12.25% and have neither a term nor a conversion option. From a balance sheet perspective, this is significant: since the preferred shares are accounted for as equity instead of debt, they significantly improve the reported debt ratios and increase financial flexibility.

This creates attractive new conditions for bondholders. In exchange for waiving the conversion option, you will receive a higher-interest instrument that:

• Runs indefinitely (refinancing risk is eliminated)
• Fully liquid (can be traded)
• Has priority over ordinary shares (better security)
• Offering an attractive yield of 12.25%

For the issuing company, on the other hand, there are no refinancing risks that can arise at critical times with classic convertible bonds.

Strategy’s $8 billion convertible bond portfolio: A use case for the Strive model

Strategy currently has about $8.3 billion in outstanding convertible notes – a significant debt burden. Interestingly, recent market developments show that Strategy’s perpetual preferred securities have now surpassed convertible bonds in nominal value, indicating a shift in investor preferences.

The largest and riskiest tranche of the convertible bond portfolio is the $3 billion series with a put date of June 2, 2028 and a conversion price of $672.40 – about 300% above the current share price of around $160. This structure offers Michael Saylor a significant refinancing risk: If bondholders exercise their put option, Strategy would have to repay the debt in cash or refinance.

This is exactly where Strive’s model could be applied. By gradually converting these convertible bonds into SATA-style perpetual preferred shares, Strategy could:

• Eliminate the refinancing risk of the 2028 put date
• Improve balance sheet quality through higher equity
• Provide bondholders with a more stable, liquid instrument
• Ensure long-term financial flexibility

Market context: Crypto sector under pressure, Bitcoin miners show resilience

The broader market context plays an important role in the urgency of these strategies. Crypto-related stocks were under heavy pressure in January and continue to fall, while Bitcoin is hovering around $84,000 in early 2026 – BTC is currently trading at around $83,600. Spot crypto trading volumes have halved to $900 billion from $1.7 trillion a year earlier, indicating subdued market enthusiasm and cautious investor sentiment amid macroeconomic uncertainties.

Nevertheless, Bitcoin miners who have aligned their business models with AI infrastructure and high-performance computing are showing above-average resilience. This trend underscores that companies that proactively optimize their business models – similar to Strategy through innovative debt management strategies – are better able to navigate through market volatility.

Outlook: Convertible bond conversion as the new norm in the Bitcoin industry?

Strive’s SATA offering not only provides a solution to a current debt problem, but could become the blueprint model for other Bitcoin treasury firms. The combination of attractive returns for creditors, improved balance sheet quality for issuers and the elimination of refinancing risks makes this approach economically rational for both sides. For Michael Saylor and Strategy, the systematic conversion of the large 2028 convertible bond tranche and other debt could be a decisive step towards greater financial stability and strategic independence.