Read How Perpetual Equity Can Solve MSTR's $8 Billion Debt

The Strategy faces a significant challenge: approximately $8.3 billion in convertible notes that need to be managed in the coming years. The largest tranche is $3 billion with a put date on June 2, 2028, and a conversion price of $672.40 per share—almost 300% higher than the current price. The problem is how to avoid refinancing risk and prevent this interest from penetrating the bottom line of the balance sheet. The answer may already be here: see how another Bitcoin treasury company is doing it.

The Strive Approach: Replacing Convertible Debt with Perpetual Preferred Stock

Strive (ASST), one of the leading Bitcoin treasury management firms, recently issued Variable Rate Series A Perpetual Preferred Stock (SATA) and raised $150 million in funds for restructuring. Each SATA share is priced at $90 with a variable dividend set at 12.25%—no maturity date, no conversion feature, just perpetual.

The real strategy lies in the exchange mechanism: approximately 930,000 SATA shares were directly exchanged for convertible notes valued at $90 million. So Strive did not pay cash—it simply changed the type of obligation. Fixed-maturity convertibles became perpetual preferred equity. From an accounting perspective, this is counted as equity, not debt, improving leverage metrics and balance sheet flexibility. For bondholders, this is a better deal: higher yield (12.25% vs. conventional coupon), no refinancing risk, liquidity to sell if desired, and priority over common stock.

The Model: Why It’s Effective for MSTR

The Strategy has over $3 billion in convertible obligations to manage in the future. It can use the same blueprint: instead of rolling over or refinancing maturing debt in 2028, it can issue perfect perpetual preferred securities and use the proceeds and existing assets to exchange or retire convertibles.

This offers many advantages. First, the perpetual structure eliminates refinancing risk—no maturity date to worry about. Second, preferred equity is more flexible for operations and strategic investments, especially if the company still wants to buy Bitcoin. Third, leverage ratios improve because perpetual preferreds are counted as equity, not debt, helping credit metrics.

Debt Details and Timeline

The Strategy is left with multiple tranches of convertible notes. The heaviest is the $3 billion with a put date in 2028—that’s the most critical to address. Also included are Semler Scientific convertible senior notes maturing in 2030. Conversion prices are significantly above market, so dilution would be substantial if shares reach maturity.

Through perpetual preferred equity, the company effectively extends its runway. The SATA model shows that investors are willing to accept the perpetual structure if it offers attractive yield and liquidity. For Strategy and Executive Chairman Michael Saylor, this provides an additional pathway to reduce maturity concentration risk and remain flexible in capital management.

The key insight: this is not traditional refinancing. It is restructuring—changing the terms, the nature, and the risk profile of the liability. Bondholders receive a perpetual instrument with income certainty, while the company gains breathing room and operational flexibility. For Bitcoin treasury companies with large convertible liabilities, this is a model that requires serious reading and understanding.