Strategy Holds STRC Dividend at 12% as Stock Stays Below Par

A Rate That Keeps Climbing but Can’t Reverse

Strategy (Nasdaq: MSTR) Executive Chairman Michael Saylor confirmed connected August 1 that the Stretch Dividend Rate for STRC, the company’s Variable Rate Series A Perpetual Preferred Stock, volition clasp astatine 12.00% for August 2026. STRC launched successful July 2025 astatine a 9% complaint and has climbed done 7 consecutive monthly increases since, reaching 12% for grounds dates opening July 1, 2026.

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The increases travel a ratchet mechanism, i.e. the dividend rises 0.5% whenever STRC trades beneath $95, and erstwhile triggered, an summation cannot beryllium reversed adjacent if the terms recovers. Strategy resets the complaint monthly to propulsion STRC’s terms backmost toward its $100 par worth and portion retired volatility, a mechanics the institution depends connected to contented caller STRC shares done its at-the-market (ATM) programme and rise caller superior for bitcoin purchases.

STRC is 1 of respective preferred banal instruments, alongside STRK, STRF and STRD, that Strategy has issued to money its bitcoin acquisitions without diluting communal shareholders arsenic heavy arsenic issuing much MSTR banal would. Strategy besides shifted STRC to a semi-monthly dividend outgo schedule, with the archetypal twice-a-month payout landing connected July 15, 2026, replacing the azygous monthly outgo investors had received since the July 2025 launch.

Still Stuck Below Par

The mechanics has not worked arsenic intended. STRC closed astatine $89.46 connected July 31, down somewhat from a erstwhile adjacent of $89.50, putting the banal astir 10 to 11% beneath par adjacent astatine the highest dividend complaint successful its history. The banal touched a debased of $71.25 successful June and has not traded astatine par since mid-May.

Competition has added unit with rival Strive’s SATA preferred information offering a astir 13% output with regular dividend payments and nary underlying debt, drafting capitalist request distant from STRC adjacent earlier its June terms collapse. The dispersed betwixt the 2 securities has widened to 1 of the largest gaps connected record, with SATA trading adjacent its ain $100 par worth portion STRC lags good down it.

The persistent discount has forced Strategy to intermission caller STRC issuance done its ATM program, limiting the company’s quality to support adding to its bitcoin holdings utilizing that circumstantial backing channel.

STRC’s struggles person tracked bitcoin’s ain volatility this year. The preferred banal has historically moved successful tandem with bitcoin’s price, and weakness successful the underlying plus has made it harder for Strategy (Nasdaq: MSTR) to support STRC anchored adjacent par adjacent with a record-high dividend complaint attached to it.

Warnings Galore

Analysts astatine Onramp Bitcoin cautioned that the ratchet operation carries semipermanent hazard fixed it lone moves successful 1 direction, with CEO Michael Tanguma pointing out:

A superior operation that survives volatility lone by adding imperishable obligations is simply a operation with a finite fig of cycles successful it.

Rosen Law Firm opened an probe connected June 25 into whether Strategy tin prolong its preferred dividend payments if bitcoin remains beneath the company’s astir $75,651 mean outgo basis. Adding to the attraction risk, retail investors clasp an estimated 83%, oregon astir $8.8 billion, of outstanding STRC shares, a basal analysts person flagged arsenic much prone to reactive selling during downturns than organization holders.

Strategy has built fiscal buffers to offset those concerns. The institution holds a liquidity buffer covering astir 26 months of dividend and involvement obligations, aft adopting a Digital Credit Capital Framework successful precocious June that authorized $2 cardinal successful combined preferred and communal banal buybacks alongside a bitcoin monetization program.

That programme lets Strategy merchantability bitcoin erstwhile absorption deems it advantageous, with proceeds directed toward reserves, dividends and share repurchases, though the institution has stressed it carries nary work to sell.