- Strategy is asking shareholders to approve daily dividend accrual across its four US listed preferred stocks, STRF, STRC, STRK and STRD, with dividends accruing every calendar day including weekends and holidays and paid the next business day. The vote is set for October 28, and STRC first daily dividend would be paid November 2 if approved.
- The change affects timing only, leaving dividend rates and total regular dividend amounts unchanged. It is aimed primarily at STRC, which moved from monthly to bi-monthly payments in June, has traded below its $100 stated value since May and fell as low as $71 during bitcoin June selloff. It currently sits near $98.65 on a 12% annual rate.
- Strategy has already spent about $1 billion repurchasing preferred shares under a $2 billion programme, including $174 million of STRC in the week ended September 20, without restoring the price to par.
- The competitive pressure comes from Strive SATA preferred, which pays every business day at a 13% annual rate and continues to hold near $100. Strategy holds 846,000 bitcoin acquired for $63.80 billion at an average $75,416 a coin, against a price around $83,600 Friday. Its shares traded at $158.41, down 2.15%.
What Happened?
Strategy says the aim is to support a trading price close to $100. Daily payments could appeal to income investors by shortening the wait to receive and reinvest dividends and by smoothing price movements around payment dates, since a preferred accruing daily carries less accumulated dividend value at any given moment.
Why It Matters?
Payment frequency is unlikely to be the reason STRC trades below par, and the evidence is in its own price history. The security fell to $71 during bitcoin June selloff, a 29% decline from stated value, which no dividend schedule explains. A perpetual preferred whose price moves with bitcoin is being valued by the market as bitcoin-linked credit rather than as a fixed income instrument, and the discount reflects a judgment about the issuer rather than about convenience. Daily accrual does not change what backs the dividend. If bitcoin falls again, STRC will fall again on the same logic, whatever the payment calendar says. The capital allocation picture is the more significant signal. Strategy has deployed roughly $1 billion of a $2 billion programme buying back preferred shares to defend a gap now worth about $1.35 per share, and in the same period bought $75.7 million of bitcoin in a week. The largest corporate holder of bitcoin is committing substantially more capital to supporting its own capital structure than to accumulating the asset its strategy is built on. That is what a maturing version of this model looks like, and investors should weigh it against the accumulation narrative. For income investors the honest framing is that 12% and 13% yields on perpetual preferreds are not anomalies to be arbitraged. They are the market price for subordinated claims on companies whose assets are a single volatile holding, and the June drawdown showed what that means in practice. The SATA comparison also cuts the other way: Strive pays a higher rate and holds par, which suggests investors distinguish between these issuers on terms rather than treating them as equivalent.
What Next?
The October 28 shareholder vote is the gate, with the first daily payment scheduled for November 2 if it passes. Watch whether STRC closes the remaining gap to $100 in the days following, since that is the clean test of whether payment timing was ever the issue. If it does not, the explanation is credit and the remaining $1 billion of the buyback programme becomes the next question. Bitcoin is the variable that matters most: another drawdown of the kind seen in June would pull all four preferreds down regardless of dividend mechanics, and that correlation is the thing to watch rather than the yield. Also track whether Strategy continues buying back preferreds at the current pace relative to bitcoin purchases, because that ratio shows where management believes the marginal dollar is best spent.
Affected Tickers and Coins: MSTR, STRC, STRF, STRK, STRD, ASST, SATA, BTC
Source: CoinDesk
