Strategy proposes daily dividends on its preferred stock; STRC at $98.40 is still short of its $100 goal
Holders of STRC, STRF, STRK and STRD would be paid every business day for every calendar day if shareholders approve on Oct. 28. The company says the total paid does not change. What changes is how the securities trade.
Strategy Inc, the bitcoin-buying company formerly known as MicroStrategy, wants to pay dividends on its four preferred stocks every day. In a Form 8-K filed Friday, the company said its board approved asking shareholders to amend the terms of STRF, STRC, STRK and STRD so that each has "a regular dividend record date on each calendar day, with the related dividend, if declared, payable on the next following business day."
A virtual special meeting is set for Oct. 28, with a record date of Sept. 25. If approved, the first daily STRC dividend would be paid on Nov. 2 to holders of record on Nov. 1. STRF, STRK and STRD would start in January 2027, with first payments on Jan. 4.
What does not change
The headline sounds like a bigger payout. It is not. The filing says the amendments "do not increase or decrease the total amount of regular dividends payable" and do not change any of the four dividend rates or the company's overall dividend obligations. Michael Saylor described it the same way on Friday: dividends "accruing every calendar day, including weekends and holidays, and paid the next business day, with economics unchanged," as quoted by CoinDesk.
A holder earning a 12% annual rate still earns 12% a year. The money simply arrives in many small pieces instead of a few larger ones.
What it is really for: the $100 line
Saylor said the goal is to "support price stability, liquidity, and demand." The number to watch is STRC's price. In a Sept. 1 filing, Strategy set STRC's dividend rate at 12.00% for semi-monthly periods starting Sept. 16 and said management would recommend keeping it there "until STRC has demonstrated sustained, healthy trading near $100 per share."
On Friday morning STRC traded at $98.40, according to Nasdaq data, within a 52-week range of $71.25 to $100.42. It is close to the target, but not there. Daily payments remove the pattern where a preferred stock drifts up before each record date and drops after it, which is one reason a price can wobble around a target. Smaller Strive already moved its SATA preferred to daily dividends several weeks ago, CoinDesk noted.
This comes days after Strategy spent more buying back its own preferred than buying bitcoin.
Who it matters to
- Income investors in STRC get cash sooner and no longer need to time purchases around record dates.
- MSTR shareholders vote on it. Common stock traded at $159.79 on Friday morning, down 1.1%, in a 52-week range of $81.81 to $365.21.
- Crypto traders track Strategy's capital decisions, because they set how much bitcoin it buys. This week more money went to supporting its preferred than to bitcoin.
More on the company in our explainer, Strategy stock: what is actually going on.
Sources: Strategy Inc Forms 8-K (SEC); CoinDesk; Nasdaq. This is market information, not investment advice.
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