Strategy Inc. (Nasdaq: MSTR) released a proposal on September 25 to shift dividend payments on four preferred stocks to a daily accrual schedule. The proposal covers STRF, STRC, STRK, and STRD shares, each with different dividend rates and terms.
Under the proposal, every calendar day would become a dividend record date. Payments would generally arrive on the next business day if shareholders approve the change and the company's board declares the dividends. The shift would be substantial for three of the securities: STRF, STRK, and STRD currently pay declared dividends quarterly, while STRC pays twice monthly.
Strategy Executive Chairman Michael Saylor and CEO Phong Le outlined the proposal in a joint letter to shareholders. According to the company's proxy statement, the change is intended to "reduce reinvestment lag, enhance liquidity and market efficiency, and increase price stability."
Implementation Timeline
If approved, STRC would begin daily record dates on November 1, with the first payment scheduled for November 2. STRF, STRK, and STRD would begin daily record dates on January 1, 2027, with their first payments scheduled for January 4. STRC had already moved from monthly to twice-monthly distributions after shareholders approved a change in June.
The four preferred stocks have different dividend rates: STRF and STRD each carry a 10% rate, STRC carries a 12% annual rate, and STRK carries an 8% rate. STRF, STRC, and STRK offer cumulative dividends, while STRD's dividends are noncumulative. STRK can also convert into common shares under its terms.
Expected Benefits and Shareholder Vote
Strategy argues that smaller, more frequent payments may reduce dividend-related price swings and support liquidity. The company also states that increased demand for its preferred shares could drive its Amplification and Bitcoin Per Share measures, potentially improving access to capital for bitcoin purchases.
The proposed amendments would change payment frequency without altering dividend rates or Strategy's total regular dividend obligations. Common shareholders are scheduled to vote on the proposal at a virtual special meeting on October 28. Approval requires a majority of the voting power of all outstanding common shares.
