Strategy leaves preferred STRC dividend at 12% as price still below parInvestors have previously benefited from a payout boost when the preferred STRC shares traded well below their $100 par value for a month.
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
AI-assisted summary based on the linked source. Verify market-moving details at the original publisher before acting.
Strategy’s preferred STRC shares ended July trading significantly below their $100 par value, closing at $89.46 on the last trading day of the month. Despite this, the company announced that the August dividend rate on these preferred shares will remain at 12%, maintaining the rate set after a 50 basis points increase earlier in the summer. August will mark the second month where dividends are paid semi-monthly, following shareholder approval of this change in June.
Executive chairman Michael Saylor emphasized STRC’s role as an income-generating asset in his communication on social media, while CEO Phong Le stated that the company’s objective is for STRC shares to trade near their $99-$100 par value over time, although no timeline was provided. Trading volumes on Nasdaq for STRC shares were about two-thirds of daily average on the last reported day.
Financially, Strategy reported an $8.22 billion net loss in the second quarter, attributed mainly to an $8.32 billion unrealized loss on its Bitcoin holdings due to falling cryptocurrency prices. To support preferred stock dividends despite market volatility, the company has built a substantial $3.75 billion cash reserve, which they said is sufficient to cover more than two years of preferred dividend payments and interest obligations.
Additionally, Strategy recently repurchased $25 million worth of its STRC preferred shares at a discount to par value and plans to continue buying back shares while they trade below $100. Saylor hinted at forthcoming news concerning changes in the company’s Bitcoin treasury holdings, which aligns with an ongoing BTC acquisition program the company is executing. The development matters as it reflects Strategy’s efforts to manage income distribution to preferred shareholders during periods of market stress and price depreciation.