Strategy seeks approval to make STRC dividends semi-monthly

Strategy Inc. filed a proposal ahead of its annual meeting asking shareholders to approve a change to the payment schedule for its STRC preferred stock, moving payouts from a monthly to a semi-monthly schedule. The shareholder vote is scheduled for June 8. If approved, the company proposes a June 30 record date for the first semi-monthly payment, to be paid on July 15.

STRC is the Variable Rate Series A Perpetual Stretch Preferred Stock designed to trade near a $100 par value. It currently carries a variable annualized dividend of 11.5% that resets on a monthly basis. Strategy uses the stretch preferred structure to smooth price movement around par and limit sharp swings in value while raising capital to support its bitcoin purchases.

In the filing, Strategy stated the company expects the revised schedule could ‘lead to reduced reinvestment lag, enhanced liquidity, market efficiency, and increased price stability.' The proposal would alter only the timing of distributions; the dividend rate mechanism would remain variable and tied to the security's reset provisions.

Strategy has issued other preferred series-STRF, STRE, STRK and STRD-which carry fixed dividend rates and different payout terms. Those preferred instruments rank ahead of common stock in the capital structure and have been a source of funding for the firm’s asset acquisitions.

The filing also reported recent market activity for STRC, noting $1.1 billion in trading volume in a single day earlier in the week. The company reported Bitcoin holdings of 780,897 BTC following recent purchases. The annual meeting location was not disclosed in the materials filed with the proposal.

If shareholders reject the proposal on June 8, STRC dividends would remain on the current monthly reset and payout schedule.