Bitcoin treasury company Strategy is asking shareholders to approve daily dividend payments on four U.S.-listed preferred stocks — STRC, STRD, STRF and STRK — according to a preliminary proxy statement filed with the Securities and Exchange Commission.
The company's board approved the proposal on Sept. 24. Under the terms, each calendar day, including weekends and holidays, would be a dividend record date. Any declared dividend for that date would be paid on the next business day. The plan does not change the stated dividend rates on the four securities or increase Strategy's total regular dividend obligations.
STRC would be the first to move to the daily schedule, with an initial record date of Nov. 1 and payment the following day if shareholders approve the amendments. STRF, STRD and STRK would follow in January. STRC currently pays twice monthly, while the other three series pay quarterly.
Strategy co-founder and Executive Chairman Michael Saylor said the proposed changes "aim to support price stability, liquidity, and demand." The company sees the move as part of a broader effort to make its preferred securities more attractive to income-focused investors and support its "Digital Credit" platform.
STRC is a variable-rate perpetual preferred stock designed to trade around a $100 par value. It closed down 0.6% at $98.31 on Thursday, according to TradingView, after previously falling below $75 in June. Strategy later introduced a $1 billion repurchase program for preferred stock, initially prioritizing STRC, and doubled the authorization to $2 billion earlier this month.
The four securities are not economically interchangeable. STRF is the senior-most preferred series with a fixed 10% annual dividend rate. STRK carries an 8% fixed annual rate and can be converted into Strategy common stock. STRD has a stated 10% annual rate, but its regular dividends are non-cumulative. STRC has a variable rate adjusted with the stated aim of keeping the shares near their $100 stated amount.
The vote is controlled by common shareholders, not holders of the preferred securities. Approval requires support from holders of a majority of Strategy's outstanding common-stock voting power, meaning abstentions and uncast shares effectively count against passage. A virtual special meeting is scheduled for Oct. 28, with the definitive proxy expected around Oct. 5.
Strategy said strengthening its preferred securities could give the company a competitive advantage and support its ability to raise preferred equity capital for its Bitcoin treasury strategy. "Strengthening our preferred securities would create a competitive advantage for Strategy and increased demand could drive amplification and bitcoin per share," the firm said.
