Strategy, the largest corporate holder of bitcoin, is seeking shareholder approval to pay daily dividends on four of its preferred stock classes: STRF, STRC, STRK, and STRD.
Under the proposal, dividends would accrue every calendar day, including weekends and holidays, and be paid the next business day. Strategy said the economics of the preferred stocks would remain unchanged.
The company stated that if approved, the move would "reduce reinvestment lag, enhance liquidity and market efficiency, and increase price stability." Strategy added that the changes could benefit common stockholders by increasing the attractiveness of its Digital Credit instruments and supporting its ability to access preferred equity capital.
Shareholders will vote on the proposal at a meeting scheduled for October 28.
Company Background
Strategy, formerly known as MicroStrategy, is an enterprise software company that pivoted to a bitcoin treasury strategy in 2020. The company initially purchased bitcoin to protect shareholders from inflation and has since aggressively accumulated the asset.
Strategy slowed its bitcoin purchases this year as the cryptocurrency entered a bear market. The company focused on protecting its balance sheet and sold portions of its bitcoin holdings. In a recent filing, Strategy reported buying 950 bitcoins for $75.7 million last week, marking its first purchase since August.
The company operates a program under which it may sell bitcoin to generate up to $1.25 billion in proceeds for its USD reserve, fund preferred stock dividends and interest expenses, or fund stock repurchases.
Strategy's Nasdaq-listed stock (MSTR) has declined nearly 50% over the past year alongside weakness in bitcoin prices. However, since the company began its bitcoin strategy in 2020, MSTR shares have appreciated by approximately 1,000%.
