Strategy daily dividends approved as STRC switches in November

The biggest corporate bitcoin holder is turning its preferred shares into something closer to a money market product. Strategy daily dividends won shareholder approval on Wednesday, Chairman Michael Saylor said preliminary results showed 99.3% of votes cast in favor.

What happened

The amendment covers all four of Strategy's US-listed preferreds: STRF, STRC, STRK and STRD. Instead of semi-monthly or quarterly schedules, every calendar day becomes a record date, including weekends and holidays, with payment on the next business day. Annual dividend rates do not change. They range from 8% to 12%, and STRC's variable rate is currently 12%, Cointelegraph reported.

STRC moves first, with its first daily record date on Nov. 1 and the first payment on Nov. 2. STRF, STRK and STRD follow from Jan. 1, with payment on Jan. 4, 2027. The change still requires Strategy to file the amended certificates of designations, its 8-K says.

Because US markets are shut on weekends, dividends with weekend record dates will be bundled. In the company's example, the Nov. 6, 7 and 8 dividends would all share a Friday, Nov. 6 record and ex-dividend date, with payment on Monday, Nov. 9. A buyer on that Friday would get none of the three, while a seller that day would keep all of them.

That quirk comes from the T+1 settlement cycle. Under Depository Trust Company practice, a record date that lands on a weekend or holiday is moved back to the prior business day, and Nasdaq generally sets the ex-dividend date the same way, the filing explains. Treatment could differ for shares traded on other venues or held through some brokers.

Why it matters

Strategy says shorter payment cycles should support liquidity and damp price swings in the preferreds. That matters for STRC, which traded at $99.86 on Wednesday, just under its $100 par value, Decrypt said. Last week the company took a break from bitcoin buying, its first since mid-September, and used $204.9 million to repurchase STRC. For STRC holders, the move means 365 record dates a year instead of 24.

Strategy daily dividends also answer a rival. Strive introduced daily payouts on its SATA preferred in June, and its newer SATS preferred, sold as 7 million shares at $90, is due to start daily payments on Nov. 9, subject to declaration. Strive and recently raised $630 million through the 15% Strive SATS preferred offering. Strategy, meanwhile, still faces possible removal from MSCI indexes under the MSCI non-operating rule, with the list of affected companies due on Nov. 11. It holds 848,517 BTC, according to BitcoinTreasuries.net data cited by Cointelegraph.

What's next

The first test of Strategy daily dividends comes with STRC's switch next week, and with whether the stock can hold near par once daily payouts start. The other three preferreds follow in January. The announcement is on Strategy's website.