Bitcoin: Strategy will pay daily dividends on STRC starting November

Strategy takes a new step in its bitcoin-related financing strategy. On October 28, shareholders approved a modification enabling the daily calculation of dividends for four categories of preferred shares. This decision notably prepares for the launch of the new STRC payment schedule, expected as early as November. However, several formalities remain necessary before its implementation. The arrangement could change the pace of income paid to investors without increasing the company’s total regular obligations.

Strategy approves daily dividends for four preferred shares

On October 28, Strategy announced the approval of an amendment to the dividend rules for its preferred shares. During an extraordinary general meeting, shareholders voted in favor of the change concerning STRF, STRC, STRK, and STRD. According to preliminary results communicated by Michael Saylor on X, 99.3% of votes cast support this proposal. The vote represents an important step for the company, which seeks to adapt its financial instruments.

The amendment authorizes Strategy to calculate dividends for each calendar day, rather than relying solely on a less frequent payment schedule. The four categories of shares concerned will thus be able to follow a system considering weekends and bank holidays. However, investors will not necessarily receive a separate payment every day. When multiple closed days follow each other, the company may group the dues and pay them on the next business day.

The document submitted to the Securities and Exchange Commission also specifies the terms applicable to record dates and ex-dividend dates. These rules must comply with the requirements of Nasdaq and the Depository Trust Company. They notably determine which investors are entitled to dividends associated with a given period. For security holders, the purchase or sale date therefore remains an important consideration.

Strategy illustrates this operation with an example covering November 6, 7, and 8. Dividends corresponding to these three days could be paid together on Monday, November 9. An investor buying shares on Friday, November 6 would not benefit from these three payments. In contrast, a shareholder selling their shares that day would keep the concerned dividends according to the company’s presented schedule.

Bitcoin: STRC will adopt its new schedule starting November

The approval paves the way for the first implementation of the arrangement on STRC, also called Stretch. Strategy plans to apply the new schedule from November 1, with a first cash payment expected on November 2. The three other categories, STRF, STRK, and STRD, are expected to follow the same principle from January 1, 2027. These deadlines remain contingent on the filing and effectiveness of amended governing documents for each issuance.

The project was presented on October 16 when Strategy announced its intention to switch STRC from semi-monthly payments to daily payments. For November, the company plans to distribute one dollar per share, split into daily amounts of around 0.03 or 0.04 dollars. This organization aims to bring the income payment closer to their daily calculation. However, it does not mean that each investor will automatically receive money every day.

Strategy also maintains STRC’s annualized dividend rate at 12% for November. Management intends to recommend keeping this level until the stock maintains a price close to its $100 reference threshold. This condition directly links the distribution policy to price developments. Investors will therefore need to monitor both the dividend schedule and the stock’s ability to sustainably approach its par value.

Bitcoin remains central to Strategy’s financial model, which uses several instruments to manage its treasury and finance its operations. However, STRC is a perpetual preferred security, without a maturity date, and not an investment directly equivalent to holding bitcoins. The company presents this digital credit product to investors seeking income linked to its financial activity. Its yield and price therefore depend on characteristics specific to the security, although the treasury in digital assets occupies a central place in the company’s activities.

STRC price rises following strategy announcement

STRC price rose Wednesday after the vote result was announced. The stock recently traded at $99.78, its highest level in nearly two weeks. However, it has not regained its $100 par value since May. This development comes as Strategy seeks to make its distribution schedule more frequent and support the price of its preferred shares.

The company also used share buybacks to support STRC. Between September 28 and October 11, it spent approximately $368.7 million on buying back these shares. During the same period, the company also made additional bitcoin purchases totaling around $50.2 million. These amounts illustrate the importance given to financing and managing the price of preferred shares in recent company decisions.

According to Strategy, an increased dividend frequency could improve STRC liquidity and reduce the delay between payments and reinvestment opportunities. The company also believes this schedule could help stabilize the preferred stock price. It states that this change should not increase the total amount of its regular dividend obligations. Real effects will depend on investor behavior and the stock’s trading conditions.

Strategy strengthens its financial strategy around Bitcoin

Strategy holds 848,517 BTC, representing a value exceeding $68 billion according to reported data. This reserve is a major element of its treasury, while STRC allows it to offer a financial instrument intended for income-focused investors. The company had also indicated that STRC dividends paid in November could be considered as non-taxable capital returns for U.S. federal tax purposes, up to each shareholder’s tax basis. This treatment, however, depends on individual tax situations.

The October 28 vote thus removes an important obstacle but does not resolve all operational questions. Strategy specifies that the effective treatment of dividends may vary according to stock exchanges, clearing mechanisms, and broker policies. Investors will also need to consider the final documents governing each issuance. These elements will determine the concrete conditions for applying the new system.

Starting November, Strategy is expected to test a daily distribution rhythm with STRC before a possible extension to the other three categories in January 2027. If the schedule takes effect as planned, investors will have a more frequent calculation mechanism without a guaranteed price increase. STRC price movements around the $100 threshold, payment methods, and market conditions will remain key factors. For Strategy, the challenge will be to reconcile financing its bitcoin treasury with managing its obligations toward preferred security holders.