Strategy asks shareholders to approve daily dividends on four preferred stocks
Strategy proposes paying preferred stock dividends every day
Strategy, a company that holds bitcoin as a treasury asset, wants to pay dividends on four of its preferred stocks every calendar day. The company said on Friday that it is asking shareholders to approve the change.
Preferred stock is a type of share that usually pays a set dividend and ranks above common stock when a company pays out money. A dividend is a regular payment made to shareholders.
The four affected tickers are STRF, STRC, STRK and STRD. Stockholders will vote on the proposal at a meeting on October 28.
What the proposal would change
- Dividends would accrue every calendar day, including weekends and holidays, according to a post from Michael Saylor.
- Payments would be made on the next business day, Saylor said.
- He said the economics of the instruments would stay the same.
- The stockholder vote is set for October 28.
What Strategy says the change would do
Strategy said that if the proposal is approved and adopted, it believes it would reduce reinvestment lag, improve liquidity and market efficiency, and increase price stability.
The company also said it believes the changes could benefit common stockholders by making its digital credit products more attractive and useful. In its view, that would support its ability to raise preferred equity capital and expand the capital markets toolkit it uses for its bitcoin treasury strategy.
Bitcoin buying has slowed this year
According to the report, Strategy slowed its bitcoin purchases this year as the largest cryptocurrency fell into a bear market. The Nasdaq-listed company instead focused on protecting its balance sheet and sold parts of its bitcoin.
Strategy announced a program under which it may sell bitcoin from time to time to raise up to $1.25 billion in proceeds. That money could go to its USD reserve, to help fund preferred stock dividends and interest expenses, or to fund repurchases.
The company said in a filing that it bought 950 bitcoins for $75.7 million last week, its first purchase since August.
Its stock, MSTR, is down nearly 50% over the past year. Since the company started buying bitcoin in 2020, MSTR has appreciated by nearly 1,000%, the report says.
What is confirmed
Strategy has put the proposal to stockholders and set a vote for October 28. The plan covers four preferred stock tickers: STRF, STRC, STRK and STRD. The company bought 950 bitcoins for $75.7 million last week.
The reasons Strategy gives for the change are its own expectations. The report does not confirm that the expected benefits would happen.
What is still unclear
The source does not say whether stockholders will approve the proposal, what the dividend amounts or schedules are before and after the change, or what would happen if the vote fails.
Why the vote matters for Strategy's bitcoin plan
Strategy is described as the largest corporate holder of bitcoin. The company links the attractiveness of its preferred shares to its ability to raise capital for its bitcoin treasury strategy. The October 28 vote will decide whether the daily dividend plan moves forward.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.