Strategy proposes daily dividends to bring STRC back toward $100
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Strategy (MSTR) is proposing that shareholders approve a shift to daily dividend payments for its four U.S.-listed preferred stocks, including STRC, with a vote set for October 28. The change would alter the timing of dividend payments without affecting the overall dividend rate or total payout. This adjustment aims to help STRC preferred shares trade closer to their $100 stated value.
Why it matters
According to Strategy, paying daily dividends rather than less frequent payments could make STRC more attractive to income investors by reducing the waiting time to receive and reinvest dividends. It may also smooth price fluctuations around dividend dates, potentially supporting STRC’s market price near its $100 stated value.
Key context
STRC preferred shares have shifted from monthly to bi-monthly dividend payments in June but have struggled to maintain the $100 parity since May, partly due to Bitcoin's selloff in June. Meanwhile, a competing preferred stock (SATA) pays dividends daily at a 13% annual rate and remains near $100, creating pressure on STRC. Strategy has been repurchasing preferred shares aggressively, spending about $1 billion so far under a $2 billion program.
Key numbers and entities
Strategy (MSTR) holds 846,000 BTC purchased for $63.8 billion at an average cost of $75,416 per coin. STRC currently yields a 12% annual dividend rate and priced around $98.65. Strategy repurchased $174 million of STRC shares the week ended September 20. The shareholder vote on the dividend proposal is scheduled for October 28, with the first daily dividend scheduled for November 2 if approved. Bitcoin traded near $83,600, and MSTR’s stock was around $158, down 2.15%.
What remains unclear
The source does not specify the detailed mechanics of how daily dividend accruals will be calculated or the potential tax implications for shareholders. It also does not provide information on how the market or investors have reacted to this proposal so far.