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# Perpetual preferred stock explained: STRC, STRF and 15% SATS
- URL: https://bullquill.com/perpetual-preferred-stock-explained/
- Published: 2026-10-24T18:15:58.000Z
- Updated: 2026-10-24T18:26:19.000Z
- Description: Perpetual preferreds never mature, so dividend, seniority and call terms do all the work. Strategy's four Nasdaq-listed issues and Strive's $700 million SATS show how each term functions.
- Author: Rowan Ashby
- Tags: Finance, Explainer, Glossary, Strategy, Strive, Bitcoin, Preferred Stock, STRC, #lang-en, #evergreen, #tr-perpetual-preferred-stock-explained

## Key takeaways

- Perpetual preferred stock has no maturity date. It pays a stated dividend, ranks above common stock and below all debt, and usually can only be retired if the issuer calls it or a holder put right is triggered.
- The key terms to read are the dividend type (fixed or variable), whether unpaid dividends are cumulative or lost for good, where the issue ranks, and when the issuer can redeem it.
- Strategy has four Nasdaq-listed preferreds: STRF (10% fixed, cumulative), STRC (variable, currently 12.00%), STRK (8%, convertible) and STRD (10%, non-cumulative).
- Strive priced 7 million shares of a new 15.00% cumulative SATS preferred at $90 on October 15, 2026\. It ranks below the company's variable-rate SATA, which pays 13.00%.
- Bitcoin treasury companies pay these dividends in cash while still buying bitcoin. When bitcoin falls, their cash reserves and their ability to sell new shares become more important.

## What is perpetual preferred stock?

Perpetual preferred stock explained: equity that pays a set dividend on a fixed "stated amount", usually $100 a share, never has to be repaid and ranks above common stock but below all debt. Strive priced a $700 million face-value issue on October 15.

The SEC's investor education site describes preferred stock as a class of ownership that has priority over common stock for dividends and for any payout if the company is liquidated. Preferred holders usually do not vote. In return, they receive a more predictable income stream than common shareholders.

"Perpetual" means there is no maturity date. A bond pays back its principal on a set day, but a perpetual preferred can stay outstanding for as long as the company exists. A holder who wants their money back usually has to sell the shares on the exchange at the market price. That price can be above or below the $100 stated amount.

That is the central trade-off. The issuer gets money it never has to repay, which looks like equity on the balance sheet, and in exchange it pays a higher dividend than its bonds would. The investor gets a higher stated income, but has a weaker claim than a creditor and no repayment date.

## Fixed vs variable dividends

A **fixed-rate** preferred pays the same percentage of its stated amount every year. Strategy's STRF pays 10.00% of $100, or $10 a year, in quarterly instalments, according to the company's July 2025 Form 8-K. Strive's new SATS pays 15.00% of $100, or $15 a year.

Because the payment is fixed, the market price moves instead. A buyer who pays less than $100 earns a higher yield on their purchase price. IFR calculated that SATS' 15% coupon gives a 16.7% yield at the $90 issue price. When interest rates rise, fixed preferreds tend to fall in price, much as long-dated bonds do. Bullquill's [guide to the 10-year Treasury yield](https://bullquill.com/treasury-yields-explained-10-year/) explains the link between rates and prices in more detail.

A **variable-rate** preferred lets the board change the dividend rate, usually to keep the share price near its $100 stated amount. Strategy's STRC and Strive's SATA both work this way. Strategy raised STRC's rate step by step in 2026, from 11.00% in January to 11.50% in March, according to its May 5 earnings release. Its August 8-K shows the rate at 12.00%. Strive's filings show SATA moving from 12.50% to 12.75% in March and to 13.00% in April. On October 13, Strive kept the November rate at 13.00%.

A variable rate is not a guaranteed rate. Strive's own materials say the rate is variable and that its target trading range is an objective, not a floor.

## Cumulative vs non-cumulative payouts

This is often the most important line in the prospectus.

- **Cumulative**: if the board skips a dividend, the unpaid amount is still owed and must usually be paid before common shareholders receive anything. STRF goes further. Unpaid STRF dividends compound at the regular rate plus 100 basis points, with another 100 basis points for each further missed period, up to 18% a year, according to Strategy's filing. STRK unpaid dividends compound quarterly at 8%. SATS is also cumulative, according to Strive's prospectus supplement.
- **Non-cumulative**: a skipped dividend is gone for good. Strategy's STRD is non-cumulative. Only dividends that were declared but not yet paid are owed if STRD is redeemed or the company is liquidated.

In both cases the dividend is paid only "when, as and if declared" by the board. Missing a preferred dividend is not a default in the way a missed bond coupon is. That is why non-cumulative issues usually need a higher rate to attract buyers than cumulative issues from the same company.

## Seniority: who gets paid first

Every company has a capital stack. Debt sits at the top, common stock at the bottom, and preferred stock in between. When one company has several preferreds, each has a set place within that middle layer.

At Strategy, STRF is the most senior preferred. STRC ranks below STRF but above STRK and STRD, and STRD is the most junior, according to the company's SEC filings. At Strive, SATA ranks above the new SATS, and both rank above Class A and Class B common stock. Strive's prospectus states it had no consolidated debt as of October 9, 2026, so nothing sat above SATA at that date.

Seniority matters for both dividends and liquidation. A company generally cannot pay a junior preferred while it is behind on a senior one. In a wind-down, senior holders are paid their liquidation preference first.

## Call features and holder rights

"Perpetual" does not mean the shares can never be retired. The terms usually give the issuer limited ways to redeem:

- **Clean-up call**: Strategy can redeem all of STRF, STRK or STRD for cash once less than 25% of the originally issued amount remains outstanding. Strive has the same 25% clean-up right for SATS. The price is the liquidation preference plus unpaid dividends.
- **Tax-event call**: both companies can redeem if a defined tax event occurs.
- **Holder put on a "fundamental change"**: SATS holders can require Strive to repurchase their shares at $100 plus unpaid dividends after a fundamental change, such as a takeover.
- **Conversion**: STRK holders can convert into Strategy Class A common stock at an initial conversion price of $1,000 per common share. STRK is also the only Strategy preferred whose dividend can be paid in common stock instead of cash.

Issuers can also buy back preferred shares on the market. On October 19, Strategy reported buying back $193.1 million of STRC in one week and raised its preferred repurchase authorisation to $3.0 billion. Bullquill covers that, and the October 28 vote on daily STRC dividends, in [our explainer on the Strategy STRC daily dividend vote](https://bullquill.com/strategy-strc-daily-dividend-vote-explained/).

## Strategy and Strive preferreds compared

| Issue | Issuer   | Dividend          | Type               | Cumulative?                        | Payment                             | Rank (within issuer)        |
| ----- | -------- | ----------------- | ------------------ | ---------------------------------- | ----------------------------------- | --------------------------- |
| STRF  | Strategy | 10.00%            | Fixed              | Yes, penalty compounding up to 18% | Quarterly, cash                     | Most senior preferred       |
| STRC  | Strategy | 12.00% (current)  | Variable           | Yes                                | Semi-monthly, cash (daily proposed) | Below STRF, above STRK/STRD |
| STRK  | Strategy | 8.00%             | Fixed, convertible | Yes                                | Quarterly, cash or stock            | Below STRC, above STRD      |
| STRD  | Strategy | 10.00%            | Fixed              | No                                 | Quarterly, cash                     | Most junior preferred       |
| SATA  | Strive   | 13.00% (November) | Variable           | See prospectus                     | Each business day, cash             | Senior to SATS              |
| SATS  | Strive   | 15.00%            | Fixed              | Yes                                | Each business day from Nov 9, 2026  | Junior to SATA              |

Sources: Strategy Form 8-K filings (July 7, 2025; August 3, 2026), Strategy Q1 2026 earnings release, Strive SATS prospectus supplement and pricing release (October 2026), Strive Form 8-K of October 13, 2026\. Rates as of October 24, 2026.

## How bitcoin treasury companies pay preferred dividends

Strategy and Strive raise money by selling preferred stock and use most of it to buy bitcoin. Bitcoin pays no income, so the dividends have to come from somewhere else. In practice there are three sources:

1. **A cash reserve.** Strategy reported a USD Reserve of $4.83 billion as of October 18, 2026, and said $45.5 million of it was used for preferred dividends that week. Strive set aside $22.50 per SATS share at closing, enough for the first 18 months of SATS dividends.
2. **New share sales.** Both companies sell common or preferred stock through at-the-market programmes. Strategy sold only common stock in the week to October 18, raising $22.0 million net.
3. **Selling bitcoin.** This is the option shareholders watch most closely. From July 27 to August 2, 2026, Strategy sold 1,638 BTC at an average of $63,957\. According to its 8-K, $52.4 million of the proceeds funded preferred dividends and $52.3 million funded STRC buybacks.

Size matters too. Strategy paid $400.7 million in preferred dividends in the second quarter of 2026, according to its 10-Q. Multiplied by four, that is roughly $1.6 billion a year. On that rough run rate, the October 18 reserve would cover about three years.

## What happens to coverage when bitcoin falls

Dividend coverage for these companies is usually described as bitcoin holdings divided by annual preferred dividends. A falling bitcoin price shrinks that ratio, but the dividend bill stays the same.

Take Strive as a worked example. With 14,030,176 SATA shares at 13% of $100, and 7,000,000 SATS shares at $15 each, its annual preferred dividends come to about $287 million. Strive held 36,818 BTC as of October 16\. With bitcoin near $80,000, as it was on October 24 according to CoinDesk, those holdings are worth about $2.9 billion, or about 10 times one year of dividends. At $60,000, coverage falls to about 7.7 times. These are Bullquill's estimates based on the share counts in Strive's filings, and they ignore new issuance.

Strategy has more headroom. Its 848,517 BTC are worth about $68 billion at $80,000\. Its average purchase price is $75,446, according to its October 19 filing. If bitcoin trades below that level, the holdings are worth less than they cost, as happened in early August when the company sold bitcoin near $64,000\. Bullquill's report on [why bitcoin fell below $80,000](https://bullquill.com/why-bitcoin-fell-below-80000/) covers this week's price move.

A falling bitcoin price also hurts preferred holders in a second way. It can push the preferreds below their $100 stated amount. When that happens, new issuance gets more expensive. That is one reason Strive priced SATS at $90 rather than at par.

## What it means

For readers trying to understand these securities, the label "preferred" says little on its own. The terms that matter are whether the rate is fixed or variable, whether a missed payment is still owed, where the issue ranks, and whether the issuer or holder can force a redemption. Two issues from the same company can carry very different risks. For example, STRF is cumulative with penalty compounding, while STRD is non-cumulative.

For bitcoin treasury companies, perpetual preferreds turn a non-yielding asset into a fixed cash bill that never matures. The model works as long as reserves and new capital keep covering that bill. A long fall in bitcoin tests both of them at once. Company filings, especially the weekly 8-K updates on reserves, share sales and any bitcoin sales, are the most direct way to follow how that balance is changing.

## Frequently asked questions

### What is perpetual preferred stock?

It is a class of shares that pays a stated dividend, usually as a percentage of a $100 stated amount, and has no maturity date. It ranks above common stock and below debt for dividends and liquidation. The issuer never has to repay it, although the terms may allow a call in limited cases.

### What is the difference between cumulative and non-cumulative preferred stock?

With a cumulative preferred, skipped dividends are still owed and must generally be paid before common shareholders receive anything. With a non-cumulative preferred, a skipped dividend is lost for good. Strategy's STRF, STRC and STRK are cumulative. Its STRD is non-cumulative.

### What dividend does Strive's SATS preferred pay?

SATS pays a fixed, cumulative 15.00% a year on its $100 stated amount, which is $15 a share. Strive priced 7 million shares at $90 on October 15, 2026\. Dividends are paid each business day from November 9, 2026, when declared.

### Can perpetual preferred stock be redeemed?

Yes, but only in limited cases. Strategy and Strive can redeem an issue for cash once less than 25% of the original amount remains, or after a defined tax event. SATS holders can also require a repurchase at $100 plus unpaid dividends after a fundamental change, such as a takeover.

## Sources

- [Investor.gov (SEC): Preferred stock glossary](https://www.investor.gov/introduction-investing/investing-basics/glossary/preferred-stock?ref=bullquill.com)
- [Strategy Inc., Form 8-K, July 7, 2025 (STRF, STRK, STRD terms)](https://www.sec.gov/Archives/edgar/data/1050446/000095017025094137/mstr-20250707.htm?ref=bullquill.com)
- [Strategy Inc., Q1 2026 earnings release, May 5, 2026](https://www.sec.gov/Archives/edgar/data/0001050446/000105044626000024/mstr-20260505x8kxex991.htm?ref=bullquill.com)
- [Strategy Inc., Form 10-Q for the quarter ended June 30, 2026](https://www.sec.gov/Archives/edgar/data/0001050446/000105044626000044/mstr-20260630.htm?ref=bullquill.com)
- [Strategy Inc., Form 8-K, August 3, 2026 (bitcoin sales, STRC 12.00%)](https://www.sec.gov/Archives/edgar/data/0001050446/000119312526329565/mstr-20260803.htm?ref=bullquill.com)
- [Strategy Inc., Form 8-K, October 19, 2026 (holdings, USD Reserve, buybacks)](https://www.sec.gov/Archives/edgar/data/0001050446/000119312526424688/mstr-20261019.htm?ref=bullquill.com)
- [Strive, Inc., SATS prospectus supplement (Form 424B5), October 2026](https://www.sec.gov/Archives/edgar/data/0001920406/000095010326015734/dp255138%5F424b5.htm?ref=bullquill.com)
- [Strive, Inc., SATS pricing release (Form 8-K, Exhibit 99.1)](https://www.sec.gov/Archives/edgar/data/0001920406/000095010326015690/dp255095%5Fex9901.htm?ref=bullquill.com)
- [Strive, Inc., Form 8-K on SATA November dividend rate](https://www.sec.gov/Archives/edgar/data/0001920406/000162828026065594/asst-20261012.htm?ref=bullquill.com)
- [Strive, Inc., Form 8-K, October 19, 2026 (bitcoin holdings)](https://www.sec.gov/Archives/edgar/data/0001920406/000162828026066222/asst-20261019.htm?ref=bullquill.com)
- [IFR: Strive taps preferred market again for US$630m](https://www.ifre.com/equities/2499827/strive-taps-preferred-market-again-for-us630m?ref=bullquill.com)
- [CoinDesk: Bitcoin slides below $80,000 on U.S. Middle East evacuations (October 24, 2026)](https://www.coindesk.com/markets/2026/10/24/crypto-under-weekend-pressure-bitcoin-slides-below-usd80-000-on-u-s-middle-east-evacuations?ref=bullquill.com)

This article is for information only and is not investment advice.