After making a comeback by adding more Bitcoin [BTC] to its treasury, Michael Saylor’s Strategy is proposing to change how dividends are accrued and paid on its preferred securities—STRF, STRC, STRK, and STRD.
With this change, Strategy wants to move from monthly, semi-monthly, or quarterly dividend schedules to a system where the dividend accrues every calendar day, including Saturdays, Sundays, and U.S. market holidays.
The accumulated amount would then be paid on the next business day, which Strategy refers to as the next evolution of its “digital credit” products.
What is this proposal all about?
Additionally, the proposal aims to make Strategy’s preferred securities more like liquid cash/yield instruments by using daily dividend accruals to reduce price volatility, improve liquidity, and potentially boost demand.
For STRC, Strategy aims to keep the price near its $100 par value through share sales above $100 and buybacks below $100.
This came after the company shifted from monthly to semi-monthly dividends, which reduced ex-dividend price drops from 49 to 36 basis points. And further expects daily accruals could further reduce volatility, though this is not guaranteed.
However, if at all this happens, STRC would move from 24 record dates a year to 365, or 366 in leap years, while STRF, STRK, and STRD would shift from four quarterly record dates to daily accruals.
This means dividends would accrue about 15 times more frequently for STRC and 90 times more frequently for the other three preferreds. Remarking on the same, Saylor said,
The stronger STRC is, then the better a platform (4:03) it is for all of these other innovative products.
What’s next?
However, as of now, the proposal still requires shareholder approval. But if approved, STRC would begin daily accruals on the 1st of November 2026, with the first payment on the 2nd of November.
Meanwhile, STRF, STRK, and STRD would switch on the 1st of January, 2027, after completing their existing Q4 2026 dividend cycle.
Hence, Saylor concluded it best when he said,
We think these amendments should help us issue the strongest digital credit in the world, and improve stretch, and that should also help us create the best equity in the world, MSTR, which will further help us increase our Bitcoin and our Bitcoin per share.
This came as STRC stock was trading at $98.54 after a hike of 0.23% in the past trading session. Meanwhile, MSTR was trading at $158.61 after a drop of 1.86% during the same period.
At the same time, Strategy’s Bitcoin holdings have reached around 846,000 BTC, with roughly $10 billion in unrealized losses to about $8 billion in gains.
Final Summary
- The proposal aims to make Strategy’s preferred securities more like liquid cash/yield instruments.
- Once approved, STRC would begin daily accruals on 1st November, with the first payment on 2nd November.
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