BlackRock invests 380 million in MicroStrategy preferred stock through PFF ETF

BlackRock’s iShares Preferred and Income Securities (PFF) fund holds a $380 million exposure to shares of MicroStrategy, the largest publicly traded company that accumulates bitcoin in its assets. This concentration reflects the strategy of the largest global asset manager to diversify its fixed income portfolio into hybrid instruments that combine bond characteristics with equity appreciation potential.

Stretch dominates MicroStrategy’s preferred portfolio in PFF

The Stretch (STRC) product, a perpetual preferred stock issued by MicroStrategy, represents the ETF’s fourth-largest position, with an allocation of $210 million and a weight of 1.47% as of Jan. 16. This instrument offers investors an annual yield of 11%, distributed monthly in cash, with monthly adjustments aimed at keeping trading close to the face value of $100 and minimizing price volatility.

PFF’s choice to concentrate significant resources in Stretch reflects its assessment that these preferred securities offer competitive profitability comparable to high-yield bonds, while maintaining shareholding characteristics that attract investors looking for cash flow.

Expanded Portfolio: MicroStrategy Income Add-ons

In addition to Stretch, the PFF ETF holds other positions in MicroStrategy perpetual preferred instruments. The Strife bond (STRF) concentrates 97.5 million in investments, representing 0.69% of the portfolio, while Stride (STRD) has an allocation of 73 million, equivalent to 0.51%. The fund also holds a position in MSTR common shares in the amount of 90 million, or 0.64% of the portfolio.

This multi-instrument strategy from the same firm demonstrates how sophisticated asset managers build tiered exposures, taking advantage of different risk-return characteristics offered by common and preferred securities of the same issuer.

Price dynamics reflect broader correction movement

MicroStrategy’s common stock fell about 5% in premarket trading, while Stretch was priced slightly below its par value of around $99.94. This move is part of a context of gain-making that affects multiple high-beta assets.

XRP Pressure Follows Broader Volatility Cycle

In the cryptocurrency market, XRP experienced a drop of approximately 5%, oscillating from 1.91 to close to $1.80 as bitcoin’s correction triggered widespread risk selling. More recent data indicate a price around 1.82 dollars with a negative movement of 4.90% in 24 hours.

The intensifying decline occurred after XRP broke down technical support around $1.87 accompanied by high volume, erasing the gains accumulated during the previous week. Traders identify a potential floor in the zone between $1.78 and $1.80, and sustained movement above 1.87 to 1.90 is needed to suggest recovery, in contrast to a possible intensification of the decline.