Summary Strategy (for which I said “Sell” on 2/13/26), is more than just a stock or even bitcoin play. It’s actually the parent of four high-yielding children, more specifically preferred stocks. I can dislike parent MSTR but still like one or more of its children. It’s like me being a customer of Citigroup and Schwab but hating bank and brokerage stocks. My favorite child, and I think MSTR’s favorite too, is a so-called treasury credit nicknamed “Stretch” with a ticker STRC. An adjustable dividend keeps the price near par. Buy. “Strike,” ticker STRK, is a convertible issue. Like the MSTR parent, it offers “amplified” exposure to bitcoin. But STRK’s volatility is less stomach churning. I say “Buy” here too. I say “Sell” for he other two children. “Stride,” ticker STRD, is a non-cumulative preferred. I hate that. “Strife,” ticker STRF, is a meh cross between Stretch and Strike. Don’t think of buy-and-hold (or as some say, hoarding ) bitcoin treasury company Strategy ( MSTR ) as a stock. See it instead as a family. On 2/13/26 , I gave MSTR, the parent, a “Sell” rating. I didn’t do that because I hate bitcoin. I don’t. (See here and here .) Instead, I expressed my discomfort with the aggressive and complex way its once-intriguing (to me) intelligent leverage program evolved. Skipping the details (which you can read here ), it’s status as bitcoin amplified has become bitcoin too-amplified . But that doesn’t mean I have to spurn all of its offspring. I can accept, like, or love, certain products. But at the same time, I can hate shares of the company that makes or offers them. For example, I am and have long been a customer of Citigroup ( C ) and Charles Schwab ( SCHW ). But I’ve never for a nano-second considered owning either equity. Both, along with much of their respective industries, are on my personal no-no list. I despise bank stocks because I, as a non-insider public shareholder, don’t have as much information as I’d need to properly judge the quality of C’s loan portfolio or the efficacy of its approach to designating and reserving for questionable loans. I have similar issues with SCHW. How can I credibly forecast trading activities and SCHW’s approach to investing its own assets? I face a comparable situation with family-MSTR. In contrast to banks or brokerage companies, I believe I can reasonably evaluate bitcoin, the foundation of the house in which this family lives. My concern here is risk. I can handle volatility — to a point. As explained on 2/13/26 , MSTR involves too darn much of it. But one of MSTR’s children, the Strategy Inc 8.00% SERIES A PERPETUAL STRIKE PFD ( STRK ), nicknamed “Strike,” mutes the extremes of MSTR common. Consistent with CEO Michael Saylor’s MSTR vision, it offers exposure to bitcoin but with gains and declines amplified. But the STRK’s moves, both ways, turn out to be what I regard as more tolerable degrees. Meanwhile, the Strategy Inc 9.0% SERIES A PERPETUAL STRETCH PREF STK ( STRC ), nicknamed “Stretch,” looks to be an intriguing gem. MSTR refers to it as a treasury credit. I think of it as the favorite child — MSTR’s favorite, and mine. I’m rating STRK and STRC as “Buy,” albeit for very different reasons. I’m less intrigued by the other two kids… The Strategy Inc 10.00% SER A PERPETUAL STRIFE PFD STK ( STRF ), nicknamed “Strife,” is meh. It occupies something of a middle ground between STRK and STRC. And for me, the non-cumulative (see below) nature of the Perpetual Stride Preferred Stock ( STRD ), nicknamed “Stride,” is an automatic turnoff. Not seeing a reason to own STRF or STRD, I rate both “Sell.” NOTE: I usually rate stocks based on how I expect them to perform relative to the market. But because family MSTR differs from ordinary common stocks or ETFs, I alter my approach. My buy or sell ratings for each reflects my view on whether or not it should be owned. Finally, as is the case with many families, the MSTR kids have a distant cousin. It’s a Euro-denominated security. Its informal ticker is STRE. But it trades only in Luxembourg . And it’s not part of Seeking Alpha’s database. Accordingly, I won’t rate or cover it. As noted above, I reviewed MSTR on 2/13/26 . This report will address the children. Let’s start with… A Group Overview Here, for your convenience, are re-posts of two images I published on 2/13/26 . Here, first, is a timeline of the MSTR family growth (the children’s birth order): MSTR IR And here is a summary of the characteristics of each child: MSTR - IR There are two important points I want to make about the table. First, I want to remind you about BTC Rating. As I said on 2/13/26 : BTC rating, an MSTR-created measure of the extent to which each security is (informally) collateralized by MSTR’s bitcoin holdings, is explained … in small-font text on page 88 of the latest earnings deck . Treat it as a very broad approximation, something interesting to know, but less firm than a stock’s interest coverage or dividend payout ratio. Note, too, that I ignore the Tax-Equivalent Yields. For starters, this is not tax avoidance. It’s tax deferral. In other words, the so-called “return on capital” distribution is not immediately taxable as income, but it does reduce one’s “basis.” In other words, it reduces the amount of the purchase price. So if you hold any of these in taxable accounts, these reductions will increase the taxable capital gain you’d pay when you sell. Meanwhile… Tax impact is ultimately an individual matter with advice best given by one’s own tax professional. So as a matter of analytic approach, I won’t give recommendations on this. I’ll leave it to the realm of personal advice, which I can’t supply. As a matter of information, I’ll say the return of capital feature (that results in its tax treatment) results from MSTR’s having accumulated book losses resulting from its bitcoin holdings. For situations like this, I tend to worry about potential rule changes in the future, such as alternative minimum tax liability for unrealized bitcoin gains . So in looking at the above table, assume, unless and until you determine otherwise based on your own situation, that the dividends are fully and immediately taxable as income. Here, now, is a six-month performance comparison for the preferred issues. (It’s obviously not lengthy. But all four issues are relatively new. Still, we’re already seeing rational differences among the issues. StockCharts.com In addressing each issue individually, I won’t fuss about yield differences. All are quite good. And given how imprecise volatility assessments can be in the real word (as opposed to the classroom), I can easily envision yield differences being offset by differences in share price performance. We see here that STRC has been top dog among the group. STRK is the worst performer. But its convertibility feature means it has the greatest upside potential in the event bitcoin rallies. STRF and STRD fall in the middle, and have essentially matched one another in terms of performance. Rating For STRC — The So-Called Treasury Credit The most salient aspect of STRC is its adjustable dividend. STRC’s ideal price is $100. The company can’t really dictate that it actually trade at that level. But it can make a good effort, MSTR targets a $99-$101 range for STRC. It determines price based on VWAP for the month. (VWAP stands for Volume Weighted Average Price. Rather than an ordinary average with which we’re all familiar, the company uses an average in which the prices are weighted by the volume associated with each trade. Click here for more on VWAP, which is well recognized among serious traders.) Here’s how each monthly STRC dividend is adjusted based on where VWAP came in. MSTR - IR This image shows that the STRC protocol has been working. MSTR - IR We see how the monthly dividend has been adjusted to successfully keep the price near $100. And note that this was during a time when bitcoin’s price fell. And below, we see how the MSTR parent’s choice to boost its cash reserve has dramatically cut STRC’s observed volatility. MSTR IR Here’s STRC’s price chart. StockCharts.com Notwithstanding a couple of noticeable dips, the 10-day exponential moving average ( EMA ) is now above and rising relative to the 50-day EMA. But I hesitate to use the word momentum here. Look again at the chart, especially the price numbers running down the right-hand side of the image. Notice how narrow the tading range really is! That comes from the way STRC was designed — a dividend that varies in order to keep pushing the price toward the $100 par value. We’re looking here at stability by design. Consider, too, Chaikin Money Flow ( CMF ) and the Chaikin Oscillator (CO). Both measure which party to trades is more motivated. CMF does it for institutional investors. CO does it for the market in general. CMF tells us institutional buyers remain wary. CO tells us the general market has been back and forth. It is still very early in STRC’s history. And STRC is set up such that it can’t rally much. It takes time to digest this sort of thing. And it might remain more an individual investor thing rather than an institutional vehicle. (The latter have other ways to derive income from bitcoin — e.g., derivatives). STRC’s efforts to educate the investment world about STRC will likely help going forward. MSTR - IR I believe a growing track record will eventually make more investors more willing to own STRC. But even as things are now, the stock has been performing as designed. I think STRC has a useful role in the investment world. It’s a high-yield security that’s quite different from the run-of-the-mill corporate junk bond. Obviously, it’s harder for many to get comfortable with something related to bitcoin than even to a debt-heavy corporation. But having done time in the 1980s as a junk bond mutual find manager, I don’t share that view. It’s not like I’m diminishing the risks associated with crypto. Instead, I believe many high-yield bond investors underestimate the risks inherent in that universe. And high-yield bond ETFs have much lower yields. For example, the iShares iBoxx $ High Yield Corporate Bond ETF ( HYG ) yields 5.75%. And the State Street SPDR Bloomberg High Yield Bond ETF ( JNK ) yields 6.55%. There is, of course, a “risk” of a future bitcoin boom sharply boosting STRC sentiment, and its price. In that case, the STRC dividend will have to be cut to bring the price back toward its target. But as the market becomes increasingly accustomed to how STRC works, I expect the price won’t likely rise so far as to precipitate a sharp lasting dividend cut. All in all, STRC has a unique niche in the investment universe, And it’s one I like. Accordingly, I rate it “Buy.” Rating For STRK — A Mellower Good-Yielding Version of the Parent This has, during its market life thus far, shown itself to be exactly what it was designed to be. It’s a vehicle that, like MSTR, offers an amplified version of bitcoin returns. But in contrast to MSTR, the degree of amplification here is less stomach-churning. A nice yield is another plus. (MSTR doesn’t pay a common dividend.) Notice below how effectively STRK’s convertibility feature softened bitcoin’s recent decline. StockCharts.com It appears, from the price chart, that Mr. Market appreciate what STRK offers. StockCharts.com I would not describe this as a bullish chart. The 10-day EMA turned lower than did the 50-day measure. Meanwhile, CMF and CO are middling. But consider the downturn bitcoin recently experienced (down about 40% in the last six months)! In this environment, you can’t expect to see a bullish chart for a security whose salient characteristic is bitcoin amplified — even if it does have a good yield. Considering how difficult a time it’s lately been for bitcoin, this chart is probably as good (or less bad) than anyone has a right to expect. STRK may be too risky for many (who don’t want any amplified version of bitcoin exposure). But for those whose risk tolerances encompass this sort of thing, I believe STRK nicely does the job. So… For investors in this risk category, i rate STRK as a “Buy.” Rating For STRF — Meh I’d probably be willing to own STRF if neither STRC nor STRK existed. It shares in STRC’s good income characteristics. And like STRK, it mutes the volatility of MSTR. Ultimately, though, STRC and STRK are better at performing their respective tasks. STRC has more built-in stability due to the adjustable nature of its dividend. And STRK would better share in MSTR’s upside due to the STRK convertibility feature. The price chart suggests the market sees STRF similarly. StockCharts.com Momentum, CMF and CO are all weak. Again, I (and Mr. Market) might see things differently if neither STRC nor STRK existed. But they both exist. And both, each in its own way, are better than STRF. Note, too, that STRF pays a quarterly dividend. I prefer STRC’s monthly payout, which facilitates better compounding. I therefore rate STRF as a “Sell.” Rating For STRD — Just Saying No This is the only non-cumulative preferred issue. And that, for me, is a deal breaker. Normally, companies are free to skip paying preferred dividends. But if they do, they cannot resume paying in the future until after they have paid to shareholders all the arrears (i.e. making up for dividends that have been skipped). Non-cumulative preferred is an exception. With these, skipped dividends are gone forever. The company can resume paying any time in the future without paying the arrears. On the one hand, the non-cumulative feature makes it easier for a non-paying issuer to resume in the future. Some investors may see that as a positive. I see the other side of this coin. A company considering whether or not to skip a preferred dividend (which would likely tank the market prices of all its securities) might, if it believes a cash crunch to be temporary, be more incentivized to skip the non-cumulative issue. Ultimately, though, given all investors must consider in deciding whether to own MSTR or any of its children, this is one question — risk factor — with which we can easily dispense. The market seems less bothered by STRD’s being non-cumulative, as evidenced by STRD’s price chart. StockCharts.com Momentum, as illustrated by the relative positions and trends in the 10- and 50-day EMAs is lackluster, but not awful. Also both CMF and CO suggest currently are closer to neutrality than bearishness. Oh well — Mr. Market and I will have to agree to disagree. I see no reason to own STRD and rate it as a “Sell.” SUMMARY As to the four issues… STRC, also known as “Stretch,” the so-called Treasury security with dividends periodically adjusted to push the issue’s price toward 100, is a “Buy.” STRK, also known as “Strike,” the volatile convertible issue that like MSTR, is bitcoin amplified, is also a “Buy” given that it mutes a good deal of the volatility we see in the parent MSTR security. STRF, also known as “Strife,” falling somewhere between STRC and STRK, seems to offer little appeal on its own, and therefore rates as a “Sell.” STRD, also known as “Stride,” highly correlated with STRF but being non-cumulative, has no appeal in my view and therefore rates as a “Sell.
