MSTR's preferred shares create an interesting Bitcoin accumulation mechanism with minimal equity dilution. Consider this framework:

A strategy positions itself by selling $100K worth of preferred securities yielding 11% annually, then deploys that capital to acquire 1 BTC at $100K. The annual dividend obligation sits at $11K.

Now fast-forward five years. Bitcoin has appreciated to $1M per unit. MSTR now holds $1M in Bitcoin appreciation. Meanwhile, that $11K annual dividend commitment remains fixed. The compounding effect becomes evident—what started as a leveraged entry point transforms into pure Bitcoin exposure as the dividend obligation becomes increasingly negligible relative to the growing asset base.

This structure essentially lets holders accumulate Bitcoin while the yield income provides a cushion. The kicker? Time and Bitcoin appreciation work in favor of the position holder. The higher Bitcoin goes, the smaller the relative drag from those fixed dividend obligations becomes. It's accretion mechanics at work—gradually concentrating more Bitcoin per share while spreading costs across an expanding asset value.