Strategy takes a new step in its bitcoin-related financing strategy. On October 28, shareholders approved an amendment allowing dividends on four classes of preferred stock to be calculated daily. This decision notably prepares the launch of STRC’s new payment schedule, expected from November. However, several formalities remain necessary before its application. The scheme could change the pace of income paid to investors, without increasing the company’s total regular obligations.
In brief
- Strategy gets 99.3% of votes cast in favor of daily dividends on four preferred stocks.
- STRC must adopt this new schedule as of November 1, with a first payment scheduled for November 2.
- STRF, STRK and STRD are expected to move to daily dividends starting January 1, 2027.
- STRC price reached $99.78, its highest level in almost two weeks.
- Strategy maintains STRC’s annualized dividend rate at 12% for November, subject to expected conditions.
Strategy approves daily dividends for four preferred stocks
On October 28, Strategy announced the approval of a change to its preferred stock dividend rules. At an extraordinary general meeting, shareholders voted in favor of the change regarding STRF, STRC, STRK and STRD. According to preliminary results communicated by Michael Saylor on X, 99.3% of the votes cast support this proposal. The vote constitutes an important step for the company, which seeks to adapt its financial instruments.
The amendment allows Strategy to calculate dividends for each calendar day, rather than relying solely on a less frequent payment schedule. The four categories of shares concerned will thus be able to follow a system taking into account weekends and bank holidays. However, investors will not necessarily receive a separate payment each day. When several days of closure follow each other, the company may consolidate the amounts owed and pay them on the next working day.
THE document transmitted to the Securities and Exchange Commission also specifies the terms applicable to record dates and ex-dividend dates. These rules must comply with the requirements of Nasdaq and the Depository Trust Company. In particular, they determine which investors are entitled to dividends associated with a given period. For security holders, the date of purchase or sale therefore remains an important element to consider.
Strategy illustrates this operation with an example covering November 6, 7 and 8. The dividends corresponding to these three days could be paid together on Monday, November 9. An investor purchasing shares on Friday, November 6 would not benefit from these three payments. On the other hand, a shareholder who sold his shares that day would keep the dividends concerned, according to the forecast schedule presented by the company.
Bitcoin: STRC will adopt its new calendar from November
The approval paves the way for the first implementation of the device on STRC, also called Stretch. Strategy plans to apply the new schedule from November 1, with a first cash payment expected on November 2. The three other categories, STRF, STRK and STRD, should follow the same principle from January 1, 2027. These deadlines nevertheless remain conditional on the filing and entry into force of the amended constitutive documents for each issue.
The project was presented on October 16, when Strategy had announcement its intention to move STRC from fortnightly to daily payments. For November, the company plans to distribute one dollar per share, split between daily amounts of approximately $0.03 or $0.04. This organization aims to bring the payment of income closer to their daily calculation. However, it does not mean that every investor will automatically receive money every day.
Strategy is also maintaining STRC’s annualized dividend rate at 12% for November. Management would like to recommend maintaining this level until the stock maintains a price close to its benchmark of $100. This condition directly links the distribution policy to the evolution of the price. Investors will therefore need to monitor both the dividend schedule and the security’s ability to sustainably approach its par value.
Bitcoin remains at the center of Strategy’s financial model, which uses several instruments to manage its cash flow and finance its operations. However, STRC constitutes a preferred security with an indefinite duration, without maturity date, and not an investment directly equivalent to holding bitcoins. The company presents this digital credit product to investors looking for income linked to its financial activity. Its yield and price therefore depend on characteristics specific to the security, even if cash in digital assets occupies a central place in the company’s activities.
STRC price rises after Strategy announcement
STRC’s price rose on Wednesday after the vote result was announced. The stock recently traded at $99.78, its highest level in nearly two weeks. However, it has not regained its nominal value of $100 since May. The move comes as Strategy seeks to make its distribution schedule more frequent and support the listing of its preferred shares.
The company also used stock repurchases to support STRC. Between September 28 and October 11, it spent approximately $368.7 million repurchasing these shares. Over the same period, his additional purchases of bitcoin amounted to approximately $50.2 million. These amounts illustrate the place given to financing and management of the price of preferred securities in the company’s recent decisions.
According to Strategy, increased dividend frequency could improve STRC’s liquidity and reduce the time between payouts and reinvestment opportunities. The company also believes that this schedule could help stabilize the price of its preferred shares. It asserts that this modification should not increase the total amount of its regular dividend obligations. The actual effects will, however, depend on investor behavior and the security’s trading conditions.
Strategy strengthens its financial strategy around Bitcoin
Strategy holds 848,517 BTCrepresenting a value of more than $68 billion according to reported data. This reserve constitutes a major element of its cash flow, while STRC allows it to offer a financial instrument aimed at income-focused investors. The company also indicated that STRC dividends paid in November could be considered tax-free returns of capital for U.S. federal tax purposes, up to each shareholder’s tax base. However, this treatment depends on the individual tax situation.
The vote of October 28 therefore removes an important obstacle, but does not resolve all operational questions. Strategy clarifies that the actual treatment of dividends may vary depending on exchanges, clearing mechanisms and broker policies. Investors will also have to take into account the final documents governing each issue. These elements will determine the concrete conditions of application of the new system.
From November, Strategy should thus test a daily distribution rhythm with STRC, before a possible extension to the three other categories in January 2027. If the schedule comes into force as planned, investors will have a more frequent calculation mechanism, without a guarantee of an increase in price. The evolution of STRC around the $100 threshold, payment terms and market conditions will remain decisive. For Strategy, the challenge will be to reconcile the financing of its treasury in bitcoin with the management of its obligations towards holders of preferred securities.
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