Saylor’s Strategy Proposes Dividends That Accrue 365 Days a Year

Strategy Seeks Daily Dividends on Four Stocks

Holders of four Strategy preferred stocks could receive dividends more frequently under a proposal released Sept. 25 by Strategy Inc. (Nasdaq: MSTR). The proposed daily schedule covers STRF, STRC, STRK, and STRD. Every calendar day would become a dividend record date, while payments would generally arrive on the next business day. The change requires shareholder approval and board declarations.

Strategy Executive Chairman Michael Saylor and CEO Phong Le outlined the proposal in a joint letter to shareholders. On its proposal page, Strategy stated:

“If approved and adopted, we believe this would reduce reinvestment lag, enhance liquidity and market efficiency, and increase price stability.”

The company also says increased demand for its preferred shares could drive its Amplification and Bitcoin Per Share measures. Its preliminary proxy statement argues that demand could improve access to capital for bitcoin purchases.

The proposed amendments would change payment frequency without changing dividend rates or Strategy’s total regular dividend obligations. They would also keep the distinction between a daily record date and a payment date: a dividend associated with a Saturday, Sunday, or holiday would generally be payable on the next business day, if declared.

From Quarterly and Twice-Monthly to Daily

The shift would be substantial for three of the securities. STRF, STRK, and STRD currently pay declared dividends quarterly, while STRC pays twice monthly. Strategy’s Sept. 1 filing with the Securities and Exchange Commission lists those schedules and maintains STRC’s annual dividend rate at 12% for the periods beginning Sept. 16. The proposed daily cadence would divide the existing regular dividend amounts into more frequent payments.

STRC had already moved from monthly to twice-monthly distributions after shareholders approved the earlier change in June. Under the new proposal, its first daily record date would be Nov. 1, with the first payment scheduled for Nov. 2. STRF, STRK, and STRD would begin daily record dates Jan. 1, 2027, with their first payments scheduled for Jan. 4. Those dates depend on approval and the required corporate filings.

The four securities have different dividend rates and rights despite sharing the proposed payment schedule. They are the 10% Series A Perpetual Strife Preferred Stock (STRF), Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), 8% Series A Perpetual Strike Preferred Stock (STRK), and 10% Series A Perpetual Stride Preferred Stock (STRD). Strategy’s preferred-stock lineup includes cumulative dividends on STRF, STRC, and STRK, while STRD’s dividends are noncumulative. STRK can also convert into common shares under its terms.

Why Strategy Wants Faster Payments

More frequent distributions could shorten the wait before holders can reinvest their dividends. Strategy also argues that smaller, more frequent payments may reduce dividend-related price swings and support liquidity. For STRC, which has traded below its $100 stated amount, Strategy says the change is also intended to support its current intention to keep the stock trading at or close to that level. These are Strategy’s expected benefits, not established results of the proposal.

Strategy calls one of its measures “Amplification”: the dollar value of its bitcoin holdings divided by its net reserve after specified senior claims and dollar assets. A higher ratio indicates that more of its bitcoin reserve would be needed to meet those claims under the measure’s assumptions. “Bitcoin Per Share” divides Strategy’s gross bitcoin holdings by its assumed diluted share count. It measures bitcoin held by the company relative to potential common shares, not bitcoin owned directly by each shareholder.

The preferred shares are part of Strategy’s effort to raise capital around its corporate bitcoin treasury. In the proxy statement, the board argues that stronger demand for those securities could improve access to preferred equity capital for bitcoin purchases. Shareholders of Strategy’s common stock are scheduled to vote at a virtual special meeting Oct. 28; approval requires a majority of the voting power of all outstanding common shares.