Yes he has to issue MSTR shares to pay the prefs. He buys more BTC with the money taken in from prefs which is more btc per shares but if it doesn't trade at a premium that erodes over time as you get diluted to pay the prefs. If it traded at 1mnav in perpetuity 10 years of dilution would offset the upfront capital the prefs bring in. Of course this works even at 1mnav if Bitcoin goes up in value alot because the pref dividends are paid in fiat but shareholders can get Bitcoin upside exposure elsewhere so it only really works well if they trade persistently at an mnav over 1.