In the Eastern Eight Time Zone this week, Strategy has brought the popular perpetual preferred stock model from the United States to Europe for the first time, launching the first non-U.S. market product STRE. However, it has clearly encountered the embarrassing situation of "good reviews but poor sales" after its debut. On one hand, there are high-yield highlights with a face value of 100 euros, a promised 10% annual dividend, issued at a discount price of about 80 euros, raising approximately $715 million. On the other hand, the listing platform chose the Luxembourg Euro MTF, a specialized market with limited audience, and the reality of liquidity not heating up. High yield, discounted issuance, and existing successful examples in the U.S. should have formed a strong sales combination, but collectively failed in Europe. The real question becomes: why has the seemingly "high-priced and attractive" STRE not achieved the expected transactions and liquidity in Europe?
High-Yield Discount Debut: European Investors Did Not Buy In
● Design of the high-yield structure: STRE continues Strategy's consistent framework of perpetual preferred stocks, presenting an attractive coupon with a 100 euro face value and 10% annual dividend, while offering a discounted price of about 80 euros at issuance, with a fundraising scale of approximately $715 million based on a single source. In an environment where interest rates remain high, this "high yield + discount" combination theoretically creates considerable yield space, originally seen as a way to activate a group of professional funds chasing returns in Europe.
● Divergence between favorable pricing and lukewarm demand: However, from the market performance and feedback after listing, STRE has not formed the ideal trading heat in the secondary market, and "high yield does not equal good sales" has become the most intuitive reality. Discounted issuance means that the issuer acknowledges from the start the need for higher yield compensation to attract funds, and when subscription and trading enthusiasm do not amplify in sync, European investors are clearly voting with their feet, remaining cautious or even waiting regarding the risk-return matching of this complex structure.
● Unease over the pricing mechanism: Multiple market observations point to the core issue—"the lack of a transparent pricing mechanism undermines investor confidence." For perpetual preferred stocks, which are embedded with multiple clauses and whose yield structure is driven by multiple variables, if investors cannot clearly understand the logic of coupon formation, potential principal fluctuations, and future repurchase conditions, the discount and high yield may instead resemble an "incomprehensible discount." In Europe, where there is a high sensitivity to product transparency and investor protection, this inability to calculate and estimate directly suppresses the demand that should have been ignited by the high coupon.
Leaving the U.S. Home Ground: Complex Products Struggle in European Culture
● High expectations from successful U.S. examples: Prior to this, Strategy had successfully issued four similar perpetual preferred stock products in the U.S., establishing a foothold in the local market. These successful cases formed the expectation anchor for STRE's European debut—many observers believed that as long as the structural design and yield levels of the U.S. were replicated, supplemented by European funds' demand for diversified allocation beyond dollar assets, the product should naturally land smoothly. However, reality shows that "copying and pasting" is far from simple.
● Differences in risk appetite and familiarity: There is a significant gap in the acceptance of structured financial products between U.S. and European investors. U.S. investors have long been immersed in various preferred stocks, convertible bonds, and complex coupon tools, with institutions having developed a complete system for cash flow modeling and risk assessment for such products; whereas for many European institutions and family offices, complex structures imply more difficult-to-explain tail risks and compliance accountability pressures. For the U.S., this is a type of "modelable" tool; for some European funds, it resembles a "new dish" that requires additional learning costs and is not urgent to fully understand.
● Prudent instincts under regulatory culture: From the perspective of regulatory and compliance culture, Europe emphasizes investor protection and preemptive prudence when dealing with high-yield complex products. For issuers, this means needing to invest more effort in information disclosure, risk warnings, and suitability management; for buying institutions, it means facing multiple constraints from internal compliance reviews, stress tests, and accountability tracing. Within this framework, even if the yield parameters are enticing, as long as the product is labeled "structurally complex," compliance costs and reputational risks are enough to drive multiple potential buyers toward more familiar asset classes with simpler compliance explanations.
Neglected Listing Venue: Euro MTF Struggles to Support a Big Liquidity Story
● The inherent narrowness of professional markets: STRE ultimately chose to list on the Luxembourg Euro MTF, which is a trading platform aimed at professional investors and institutional clients. For issuers, Euro MTF provides a relatively flexible listing path and a mature cross-border securities infrastructure, but from the audience's perspective, it naturally excludes most retail funds and a considerable portion of institutional funds that focus only on the main board or more mainstream platforms, narrowing the pool of potential buyers from the outset.
● Insufficient channel coverage amplifies the sense of desolation: Some industry analysts have pointed out that "insufficient support from mainstream trading platforms has led to liquidity depletion." When mainstream exchanges, online brokers, and large wealth management platforms have not included STRE in their key promotion or convenient trading lists, the product is almost "invisible" on many potential buyers' screens. Without sufficiently broad channel coverage, it is difficult to attract active funds to stop and research, and even harder to foster spontaneous market-making and spread arbitrage in the secondary market.
● Invisible ceiling on depth from infrastructure: Beyond the listing location itself, the infrastructure on the exchange and brokerage side also invisibly limits STRE's market depth. Deep market-making requires stable quoting engines, continuous two-sided quotes, and sufficient counterparties, while for a newly listed product that is structurally complex and whose information disclosure is not fully standardized, some brokers and market makers' risk control models may lean conservative, reducing positions and quoting frequency. The lack of sufficient market-making and a transparent order book slows down the price discovery process, which in turn reinforces the negative perception of "no one is trading, liquidity is poor."
Lack of Transparency in Pricing and Information Gap: Trust Deficit Suppresses Trading Impulse
● Collective anxiety of not understanding and not being able to calculate: The market report's statement that "the lack of a transparent pricing mechanism undermines investor confidence" points to the opacity of pricing logic and risk-return structure. For perpetual preferred stocks, whether the coupon can be maintained long-term, the conditions triggering write-downs or repurchases, and how changes in interest rates and credit environments reflect on prices all require a clear, verifiable pricing framework. If the issuance materials and subsequent disclosures are insufficient to allow buyers to reconstruct this framework, investors will fall into anxiety over "not understanding the terms and not being able to calculate the real yield."
● Questions of risk compensation behind high yield: Discounted issuance and 10% high dividend theoretically mean that investors can receive coupon income far exceeding ordinary bonds in the short term, but for experienced institutions, this often also represents potential risk compensation—either pre-pricing for future credit risk and liquidity risk, or leaving room for adverse scenarios that complex clauses may bring. For European investors, the question of "does high yield cover up more complex risks" has become unavoidable, driving some to prefer to forgo seemingly higher returns in favor of tools with simpler structures and better explainability.
● Information asymmetry distorts price discovery: In such structured products, there is a clear information asymmetry between issuers, a few deeply researching institutions, and the vast majority of potential investors. Institutions that can fully understand product terms, pricing assumptions, and stress scenarios often have the upper hand, while the remaining participants can only rely on simplified materials or second-hand interpretations. When the informed side chooses to wait due to risk control or yield expectations, secondary market trading is difficult to gain volume, and prices cannot gradually move toward equilibrium through frequent transactions, ultimately creating an awkward situation where "some understand but do not want to buy, while most want to buy but do not understand."
Hot is Tokenized Gold, Cold is Complex Structures
● Funding direction contrasts during the same period: In stark contrast to STRE's cold reception in its European debut, the tokenized gold market has continued to heat up during the same period. Taking the representative product XAUT as an example, its market capitalization has climbed to a historical high of $2.5 billion, clearly indicating that funds are voting with real money for this asset form. Against the backdrop of macro uncertainty and lingering inflation shadows, the "on-chain version" of traditional safe-haven assets like gold has become an intuitive option for many funds seeking a safety net.
● Advantages of simple value anchoring: The core selling point of tokenized gold lies in its simple and intuitive value anchoring—each token corresponds to a certain amount of physical gold, and investors only need to judge the price trend of gold itself and the safety of custody, without needing to read lengthy terms or complex cash flow models. In contrast, complex structured products represented by STRE require understanding not only the company's credit and business but also breaking down preferred stock terms, distribution order of earnings, potential write-down mechanisms, etc. Each additional layer of structure adds to the understanding and communication costs.
● Funding choices on the risk-return curve: In a time when global interest rates have not yet returned to the zero-interest era and the overall valuation of risk assets is relatively high, funds are pragmatically choosing their position on the risk-return curve: one type is assets like XAUT that are logically clear, have good liquidity, and have easily understandable value anchors; the other type is speculative targets with extremely high returns but equally high risks. Products like STRE, which offer high yields but are structurally complex and whose liquidity has not yet heated up, find themselves stuck in the middle ground—neither as easy to understand and enter as tokenized gold, nor able to provide the explosive upside imagination space of high Beta assets, ultimately being placed in an awkward and easily overlooked position in portfolio construction.
Strategy's Next Steps and Insights for Structural Products Going Abroad
STRE's cold reception in Europe is not due to a single misstep but rather the result of multiple overlapping factors: limited channels locked the product into a narrow circle of professional investors from the start, lack of transparency in pricing and terms damaged the already cautious confidence of European buyers, and misalignment of product complexity and regional risk appetite made it difficult for the high yield advantage to translate into actual transactions. For Strategy, whether assessing whether to optimize the choice of market for listing, enhance exposure and market-making arrangements on more mainstream platforms, or provide more detailed breakdowns in information disclosure and educational materials, all will revolve around a core goal: reducing cognitive friction and making complex structures more understandable and priceable. On a broader level, STRE's story also serves as a wake-up call for all issuers preparing to "go abroad to Europe" with structured products—in a market where regulation emphasizes protection and buyers value explainability, what truly needs to be designed is not just the coupon and discount, but how to significantly reduce the "understanding cost" in design, disclosure, and communication. Otherwise, even the most enticing numbers may be consumed between incomprehension and inability to buy.
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