Strategy holds STRC dividend at 12% as shares trade below par

Strategy (Nasdaq: MSTR) confirmed on Aug. 1 that its Stretch (STRC) variable-rate perpetual preferred will pay an annualized 12.00% dividend for August record dates. The rate is the highest since STRC launched in July 2025 at 9% and follows seven consecutive monthly increases.

Under STRC’s ratchet mechanism, the dividend rate rises 0.5 percentage points each time the security trades below $95. Strategy sets the rate monthly; once an increase is triggered it remains in place even if the share price later rises. The company also moved STRC to a semi-monthly payment schedule, with the first twice-monthly payout on July 15, 2026, replacing the prior single monthly payment.

STRC closed at $89.46 on July 31, roughly 10–11% below its $100 par value. The preferred hit a low of $71.25 in June and has not traded at par since mid-May. Strategy has linked STRC’s performance to bitcoin price swings; the preferred has tracked bitcoin’s volatility this year.

Competing securities have affected investor demand. A rival preferred, SATA, offers about a 13% yield with daily dividend payments and no underlying debt and has been trading near its $100 par value. The price gap between SATA and STRC widened this year. Strategy paused new STRC issuance through its at-the-market program, reducing one channel the company uses to raise capital for bitcoin purchases.

Advisers and analysts have raised questions about the ratchet structure and dividend sustainability. Michael Tanguma, CEO of Onramp Bitcoin, warned that “a capital structure that survives volatility only by adding permanent obligations is a structure with a finite number of cycles in it.” Rosen Law Firm opened an investigation on June 25 into whether Strategy can sustain preferred dividend payments if bitcoin remains below the company’s roughly $75,651 average cost basis for its holdings.

Retail investors hold an estimated 83% of outstanding STRC, about $8.8 billion, according to analysts. Strategy reported a liquidity buffer it estimates could cover about 26 months of dividend and interest obligations. The company adopted a Digital Credit Capital Framework authorizing up to $2 billion in combined preferred and common stock buybacks and put in place a bitcoin monetization program that allows management to sell bitcoin for reserves, dividends and share repurchases, though Strategy says it is not obligated to sell.

STRC’s consecutive rate increases and the shift to semi-monthly payments have been part of the company’s approach to support the preferred as a funding tool for bitcoin purchases. The security’s discount to par and competing alternatives have limited issuance through the ATM channel.