Strategy bets daily dividends will drag STRC back above $100 📅

Strategy is asking shareholders to approve daily dividend payments across its four U.S.-listed preferred stocks, with a vote scheduled for Oct. 28 on amendments the company's board approved Thursday. The largest corporate holder of bitcoin said in a Friday SEC filing that dividends would accrue every calendar day, including weekends and holidays, and be paid on the next business day. The proposal changes payment timing but leaves dividend rates and total regular dividend amounts unchanged.

The shift would roll out in stages, with STRC moving first and its initial daily dividend payment expected on Nov. 2. STRF, STRK and STRD would follow in January, with first payments under the daily schedule expected on Jan. 4. The amendments take effect after Strategy files updated certificates with the state of Delaware.

Strategy is targeting STRC, which has traded below its $100 stated value since May and dropped to an intraday low of $71.25 on June 26 during bitcoin's selloff, according to Yahoo Finance. STRC carries a 12% annual dividend rate and went from monthly to bi-monthly payments in June. Strategy has spent about $1 billion repurchasing preferred shares under its $2 billion program, including $174 million of STRC in the week ended Sept. 20.

Speaking on Natalie Brunell's Coin Stories podcast earlier this week, Strategy CEO Phong Le tied STRC's slide to leverage the company did not anticipate. He said some investors borrowed against bitcoin at lower rates to buy STRC and capture the spread between their borrowing costs and STRC's dividend yield, then faced pressure to add collateral or sell when bitcoin's price fell. "We did not expect the amount of leverage that came into the system," Le said. "And so that's a lesson learned, next time around."

Strategy's filing follows fellow bitcoin treasury company Strive, which moved its SATA perpetual preferred to daily dividends on June 16 at a 13% annual rate and was the first public company to adopt the model. Strive holds 26,355 BTC, compared with Strategy's 846,000 BTC acquired for $63.80 billion at an average $75,416 per coin, according to BitcoinTreasuries.NET. Strategy MSTR traded around $158.61, down 2.15% on the day, while bitcoin BTC traded near $83,520.54.