In November 2025, Strategy launched its first perpetual preferred stock STRE (Stream) in Europe, targeting local institutions and high-net-worth funds through a high coupon rate + discounted issuance approach. This product is aimed at income-oriented investors primarily in Europe, hoping to provide an alternative tool that combines cash flow and brand endorsement in a global environment of fluctuating high interest rates. However, despite the seemingly "sincere" design of STRE, its performance in the secondary market post-listing has been persistently lackluster, with low trading activity and ineffective price discovery, creating a stark contrast. The core question this article attempts to dissect is why a structure that appears to be "full of incentives" has garnered so little interest upon entering the European market.
10% High Coupon with €80 Discount Design Incentives
● "Material stacking" at the terms level: From the disclosed information, STRE has a face value of €100 and an annual dividend of 10%, yet it was ultimately priced at a €80 discount. This means the nominal cash yield in the first year is further amplified, making it highly attractive on the surface to investors seeking fixed income or quasi-fixed cash flow. Perpetual preferred stocks are positioned as a "hybrid tool between debt and equity," and this combination seemingly ticks all the boxes for traditional income-oriented funds.
● Fundraising scale and data source limitations: According to the single-source information cited in the briefing, the fundraising scale for this issuance of STRE is approximately $715 million, which is not insignificant for a perpetual preferred stock debuting in Europe outside the U.S. However, due to the information coming from a single channel and lacking further public disclosure and cross-verification, this scale can only be viewed cautiously, making it impossible to derive a more detailed allocation structure and investor composition analysis.
● Signals behind the issuance terms: The combination of a 10% annual dividend and a 20% discount issuance indicates that Strategy clearly hopes to quickly establish interest among European investors through "re-incentivizing price and yield," while also betting on its brand and cash flow stability with real costs. This approach conveys confidence in its own creditworthiness and the European market's capacity to absorb the product—at least during the product design phase, the issuer did not choose a conservative trial but instead provided highly recognizable conditions.
Invisible Threshold of Listing on Luxembourg Euro MTF
● Market position and liquidity characteristics: Luxembourg Euro MTF is a multilateral trading facility serving global issuers, which is more flexible than the main market and more accommodating of complex, cross-border products. However, its inherent characteristics are institutionally oriented, highly specialized, and with limited retail coverage. In terms of liquidity, it is difficult to compare with the core markets where mainstream stocks or highly liquid bonds are traded; it resembles more of a "specialized product distribution center" rather than a trading venue with broad participant engagement and price sensitivity.
● Real feedback from limited channels: Market voices indicate that "mainstream brokers and retail platforms find it difficult to trade this product," and many investors, even if interested in the yield terms, discover during the actual operation phase that local mainstream online brokers and mobile trading apps cannot facilitate easy ordering, or can only be accessed through cumbersome offline processes. This physical resistance in trading channels directly weakens the potential demand's ability to convert into actual transactions.
● Suppressed price discovery: When a product is primarily locked into a relatively niche trading venue, and participants are mainly concentrated among a few institutions capable of accessing that market, the price discovery process is difficult to fully unfold. Insufficient depth in buy and sell orders and limited market-making resources mean that even if the terms appear attractive, the secondary market struggles to form a continuous and representative price curve. The result is that activity is suppressed, and high yields and discounts fail to translate into visible market enthusiasm, presenting more as a "silent" code rather than a competitively bid asset.
Lack of Transparent Quotes and Data, Discount Becomes a Risk Signal
● Structural issues of lacking transparent pricing: Compared to mature preferred stock markets like the U.S., STRE lacks rich public secondary trading data and continuous quotes in Europe, making it difficult for investors to calibrate real risk-return through historical transaction ranges, holding distributions, volatility, and other dimensions. For local funds unfamiliar with this type, the absence of sufficiently visual data means they cannot incorporate it into existing risk control and asset allocation models.
● European-style caution amplified under information asymmetry: Mainstream European institutions and regulated products often have high requirements for disclosure adequacy and compliance information access, and trading decisions must undergo multiple reviews for compliance and risk control. When a new product appears vague in terms of information disclosure, quote transparency, and secondary market depth, even with high coupon rates, it often gets labeled as "not to be considered for now." Information asymmetry is not just a cognitive issue; it can be amplified at the model input level into "unquantifiable risks," naturally guiding decision-makers to choose avoidance.
● "Reverse interpretation" of high coupon rates: In the absence of market-making depth and public data, a 10% annual dividend and discounted issuance may not necessarily be seen as a "dividend," but rather interpreted as a clear signal that "the market is unwilling to pay a lower yield." For investors accustomed to interpreting risk through credit spreads and capital structure positions, excessively high coupon rates often represent compensatory pricing; when transparency is lacking, this compensation can be magnified into projections of "potential issues," turning high yields into a starting point for questioning "why is it so high?"
Hesitation and Trust Threshold of European Investors
● Traditional caution towards complex innovative products: Without fabricating statistical data, it can be said that European investors generally maintain relative caution towards structurally complex and novel financial innovations. This does not imply a lack of innovative soil, but rather that regulation, compliance, and a long-termism culture lead funds to prefer tools that have been tested over time and have clear rules. For new products like STRE, which combine cross-border, perpetual, and preferred stock attributes, the instinctive reaction is not "to chase the new," but rather "to observe first, then assess."
● Strangeness of perpetual preferred stocks: Although perpetual and preferred stocks are not entirely new species in the global capital market, packaging them as branded products in non-U.S. markets under the current European interest rate environment and regulatory atmosphere still feels unfamiliar to many local investors. Especially in a context where interest rates remain relatively high and traditional bonds and deposits can still provide decent returns, the question of why to invest resources in a more complex, less informative perpetual preferred stock is hard to convince at the investment committee table with just a "10% coupon."
● Friction in brand migration: Strategy's brand and product recognition accumulated in the U.S. will not automatically replicate in Europe. From the perspective of many European institutions, it is more viewed as "an issuer from overseas lacking a long-term operational record locally." U.S. investors may have a more intuitive understanding of its brand, business model, and risk management, while European investors require time and more transparent information to build equivalent trust. The cold reception of STRE reflects, to some extent, the trust erosion in brand migration when landing across markets.
Possible Adjustment Space After the Cold Reception of Issuance
● Subsequent arrangements remain blank: As of now, the briefing clearly states that Strategy has not announced any subsequent arrangements for STRE, including whether it will adjust terms, add market-making arrangements, or expand circulation on more trading platforms, with no public information to support this. In this state, any speculation regarding its specific roadmap, timeline, or supporting measures would be considered overstepping and should be strictly avoided.
● Possible market thought directions: From a purely market perspective, if there are adjustments in the future, the logic may roughly revolve around several main lines: first, making minor adjustments to the terms structure, such as enhancing predictability in the dividend mechanism, buyback/redemption terms; second, expanding the trading channels accessible to investors, attempting to enable more mainstream brokers and platforms to support trading; third, upgrading communication strategies, focusing on information disclosure and the openness of secondary market data. However, these remain at the conceptual level and cannot and should not be concretized into "planned actions."
● Boundaries of impact on future European layout rhythm: The cold reception of STRE serves as a "paid course" on localization and market ecology awareness for Strategy. It may lead the issuer to be more cautious when promoting new projects in Europe, placing greater emphasis on channel building and regulatory communication in terms of rhythm and resource investment. However, this setback does not necessarily negate its European strategy; rather, it suggests that high-yield terms alone are insufficient to pry open a market highly sensitive to information and compliance.
Reflecting on Europe's True Test for New Products from Cold Issuance
● Core contradiction lies not in the yield itself: Overall, the contradiction of "high yield, high discount but low liquidity" in STRE fundamentally stems from channels and information, rather than simply insufficient yield. The marginalization of trading venues, limited access for mainstream brokers and retail platforms, and the lack of continuous quotes and public data have trapped a product with significant selling points at the terms level in an environment unfavorable for price discovery and trust building, making it naturally difficult to ignite demand.
● An implicit lesson for issuers: For any institution attempting to launch new products in unfamiliar markets, issuance terms are merely superficial; the real determinants of success are the trading ecology and transparency. Without smooth buying and selling paths, even the best yields are just numbers on a PowerPoint; without publicly available data that can be absorbed by risk control models, even the most prominent brands struggle to penetrate local institutions' decision-making systems quickly. The European market is not entirely averse to innovation; it simply validates "what exactly are you" in a more prolonged and structured manner.
● The next step in finding balance in Europe: For Strategy and other institutions intending to issue new tools in Europe, the key moving forward is to find a sustainable balance between innovative structures, regulatory requirements, and investor habits. This means considering the choice of trading venues, market-making arrangements, depth of information disclosure, and channel coverage from the very beginning of product design, rather than later trying to "compensate" for these gaps with high coupon rates. The experience of STRE may become a typical case in the coming years when reviewing financial innovation in the European market: it is not that the design was not aggressive enough, but that the ecosystem was far from ready.
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