Strategy Proposes Daily Dividends to Elevate STRC Towards $100

STRC has struggled to maintain its value above $100 since May, despite a significant dividend yield and substantial buybacks.

Strategy Inc. is seeking shareholder approval for a new initiative that would implement daily dividend payments for its four preferred stocks, including STRC. A vote is scheduled for October 28, with the first daily dividend anticipated to be distributed on November 2.

This proposal aims to modify the payment frequency without altering the existing dividend rates or total payouts, with the intention of aligning STRC's trading price closer to its $100 par value. The company has already invested around $1 billion in repurchasing preferred shares, including $174 million of STRC in the week ending September 20.

As the largest corporate holder of Bitcoin, Strategy plans to accumulate dividends daily, including weekends and holidays, and distribute them on the next business day. This change is particularly targeted at STRC, which has faced challenges since it shifted from monthly to bi-monthly dividend payments in June. Its price has dropped as low as $71 during a Bitcoin market downturn.

The current annual dividend yield for STRC stands at 12%. Analysts suggest that the introduction of daily dividends could enhance the stock’s attractiveness to income-focused investors by allowing quicker reinvestment of dividends and reducing price volatility around payment dates. This strategic shift aims to stabilize STRC's trading price around the $100 mark.

STRC's recent performance has been negatively impacted by competition from Strive's perpetual preferred stock, which offers daily dividends at a 13% yield and has remained close to its par value. As of Monday, Strategy holds 846,000 Bitcoin, purchased for approximately $63.80 billion at an average price of $75,416 per coin.

Currently, Bitcoin is trading around $83,600, while Strategy’s stock has seen a slight decline, trading at about $158.