Strategy seeks shareholder approval for daily preferred stock dividends

Strategy has asked shareholders to approve amendments that would shift its four preferred stocks, including STRC, to daily dividend payments while keeping dividend rates and total payouts unchanged. The company’s board approved the proposal and a vote is scheduled for a virtual special meeting on Oct. 28, with STRC expected to start daily payments in early November and the other issues to follow in January.

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Strategy seeks shareholder approval for daily preferred stock dividends

Why It Matters

If adopted, the change would expand a nascent trend in crypto treasury firms toward daily dividend schedules initiated by Strive, and it alters the mechanics of payment timing without increasing cash outflows — potentially affecting investor liquidity and trading behavior around the preferred securities.

Key Facts

Proposal: Move four preferred stocks (including STRC) to daily dividend payments without changing dividend rates or total amounts paid
Board approval: Approved Thursday; disclosed in a Friday SEC filing
Shareholder vote: Virtual special meeting scheduled for Oct. 28
STRC timing: First daily dividend payment expected on Nov. 2
Other preferreds timing: STRF, STRK and STRD expected to begin daily schedule with payments on Jan. 4

Strategy has proposed amending the terms of its four preferred stock issues so that each calendar day would be treated as a dividend record date, with the related payment made on the next business day. The company says the change would not alter the dividend rates or the total amount it pays to holders. The board signed off on the proposal, which was disclosed in a Securities and Exchange Commission filing, and shareholders will vote on the amendments at a virtual meeting on Oct. 28. Under the plan, STRC would be the first to move to the daily schedule, with an initial daily payment anticipated on Nov. 2. The other three preferred securities — STRF, STRK and STRD — are slated to switch in January, with their first payments under the new cadence expected on Jan. 4. The amendments would take effect after Strategy files updated governing certificates for the preferred stocks with the state of Delaware. The proposal follows a similar shift by fellow Bitcoin treasury company Strive, which in May said its SATA preferred stock would begin paying dividends every business day starting June 16 and disclosed that it eliminated outstanding debt in the first quarter. Strategy’s planned model differs from Strive’s in that Strategy would make every calendar day a record date, rather than limiting record dates to business days. BitcoinTreasuries.NET lists Strategy as holding about 846,000 BTC versus Strive’s 26,355 BTC. STRC is central to Strategy’s “digital credit” approach, and the security experienced pronounced price volatility earlier this year. STRC traded as low as $71.25 on June 26 after a period in which the company’s CEO, Phong Le, said more leverage entered the market for the security than anticipated. Le told Natalie Brunell’s Coin Stories podcast that some investors borrowed against Bitcoin at lower rates to buy STRC and capture the dividend yield spread, and that falling Bitcoin prices then forced margin-driven selling. Strategy has said it maintains a U.S. dollar reserve and a repurchase policy to defend STRC’s $100 stated amount; the preferred has since recovered to roughly $98.41 and carries a 12% variable annual dividend rate.