Key facts
- Strategy is maintaining the dividend on its STRC preferred stock at 12%.
- The STRC preferred stock is trading below its $100 par value.
- Strategy previously raised the dividend by 50 basis points to 12% on July 1.
- The company's objective is for STRC to trade between $99 and $100.
- Strategy has built a $3.75 billion U.S. dollar reserve to support preferred dividend payments.
Strategy is maintaining the dividend on its high-yielding preferred stock, STRC, at 12% for August, opting not to increase it despite the stock trading below its par value. Historically, the company has raised the payout when STRC traded sizably below its $100 par. As recently as July 1, Strategy had increased the dividend by 50 basis points after STRC fell to as low as $71 in June. This increase, combined with Strategy's sale of some bitcoin to fund dividends and a stabilization in bitcoin's price, helped STRC recover to its current price of $89.46, though it remains significantly below par.
CEO Phong Le stated that Strategy's corporate objective is for STRC to trade between $99 and $100 over time. However, the company is not obligated to raise the dividend and chose not to do so this month. Executive Chairman Michael Saylor announced the dividend decision via social media, continuing to promote STRC as an income-stretching investment. The company has built a $3.75 billion cash reserve to support preferred stock payouts and recently repurchased $25 million of STRC preferred shares at a discount.