Strategy declares daily STRC dividends for November, pending Oct. 28 shareholder vote

Strategy (formerly MicroStrategy) plans to pay dividends on its variable rate perpetual preferred stock, STRC, every day. The board on Oct. 15 declared daily cash dividends for each calendar day from Nov. 1 through Nov. 30, each payable on the next business day, the company said in a Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) on Oct. 16. The payments depend on shareholders approving changes to the preferred stock's terms at a special meeting on Oct. 28.

A $1 monthly dividend, split into 30 payments

The annual dividend rate stays at 12.00%. On the $100 stated amount, that works out to $1.00 a month, paid in daily amounts of $0.03 or $0.04. The first payment date is Nov. 2 and the last is Dec. 1. Business days exclude days when the Federal Reserve Bank of New York is closed, so dividends for weekends, Veterans Day (Nov. 11) and Thanksgiving Day (Nov. 26) will be paid together on the next business day.

The total payout does not change. In a Sept. 24 filing, Strategy said the amendments would not increase or decrease total dividends or dividend rates on the four preferred series, or its overall dividend obligations. The company also expects the November daily dividends to be treated as non-taxable returns of capital for U.S. federal income tax purposes, to the extent of a shareholder's tax basis.

The vote comes first; if it fails, twice-monthly payments continue

The board approved putting the daily dividend proposal to shareholders on Sept. 24, and the company filed a preliminary proxy statement with the SEC the next day. The Oct. 15 declaration sets up November's dividends in advance in case the proposal passes. The virtual special meeting is scheduled for 11 p.m. KST on Oct. 28.

Two conditions must be met. Shareholders must approve the dividend amendments by 5 p.m. New York time on Oct. 31, and the amended STRC certificate of designations must be filed and become effective by 12:01 a.m. ET on Nov. 1. Approval requires a majority of the voting power of all outstanding common stock. The record date for the meeting was Sept. 25.

If both conditions are met, the dividend Strategy declared on Sept. 30, payable Nov. 15 to holders of record on Oct. 31, will not be paid. If they are not, the daily dividends will not be paid, the Nov. 15 dividend will go ahead, and November dividends will follow the current twice-monthly schedule. The company said the two dividends will not both be paid.

STRF, STRK and STRD will keep their quarterly schedules through Dec. 31. If the change is approved, they will move to daily dividends with a Jan. 4, 2027 payment for record dates of Jan. 1, 2 and 3.

Keeping STRC close to $100

In its proxy statement, Strategy said more frequent dividends would reduce reinvestment lag, dampen price swings around record dates and help keep STRC trading near its $100 stated amount. In a letter to shareholders, Executive Chairman Michael Saylor and CEO Phong Le said the move to semi-monthly STRC dividends in June drew positive feedback and described daily dividends as the next step.

STRC is a variable rate preferred stock whose dividend rate Strategy sets each month, and it is one of the company's main channels for raising money to buy bitcoin. Its price has recently traded below $100. Cointelegraph, citing Yahoo Finance, reported that STRC traded at $99.32 on Oct. 16. Strategy repeated that management will recommend to the board that it keep STRC's dividend rate at 12% until STRC has demonstrated sustained, healthy trading near $100 per share. From Oct. 5 to Oct. 11, it repurchased 1,932,145 STRC shares for $192.4 million.

848,250 bitcoin, and the price in Korean won

In the same week, Strategy bought 250 bitcoin for $21.5 million, bringing its holdings to 848,250 BTC. Its average purchase price is $75,444, and its USD Reserve for paying dividends and interest stood at $4.88 billion as of Oct. 11.

Bitcoin traded at $81,538 on Binance at 10:30 a.m. KST on Oct. 17, about $6,100 above Strategy's average purchase price. At the same time, it traded at 110,042,000 won on Upbit's Korean won market, and the kimchi premium (the gap between prices on Korean exchanges and global markets) was about 1.1% based on Upbit.