Strategy shareholders have approved an amendment allowing the company's four preferred stocks to accrue dividends every calendar day, including weekends and holidays, according to preliminary results cited by chairman Michael Saylor on Wednesday. The proposal received 99.3% of votes cast at a special meeting of stockholders.
The amendment covers Strategy's STRF, STRC, STRK and STRD preferred stocks. Under the new schedule, every calendar day will be a record date, with payment on the next business day.
Implementation Timeline
STRC will be the first to adopt the daily schedule, with its first daily record date on November 1 and payment on November 2. STRF, STRK and STRD will follow, with their first record date on January 1 and payment on January 4.
The change remains contingent on Strategy filing amended terms for each stock, according to an SEC filing.
Weekend and Holiday Treatment
Because U.S. markets are closed on weekends, dividends with record dates on non-trading days will be grouped together in practice. The Depository Trust Company will treat a weekend or holiday record date as falling on the previous business day, which Nasdaq will also treat as the ex-dividend date.
For example, dividends with record dates of Friday, November 6, Saturday, November 7 and Sunday, November 8 would all be treated as having a Friday record date and paid together on Monday, November 9, Strategy said. Because trades settle the next business day, an investor who buys STRC on that Friday would not receive any of the three dividends, while one who sells that day would still receive all three. Treatment could differ for shares traded outside Nasdaq or held through some brokers, the company said.
Background
Strategy proposed the change last month, saying it would help dampen volatility in its preferred shares. For STRC, it means moving from 24 record dates a year to 365.
The company has been working to support STRC, which traded at $99.86 on Wednesday, just below its $100 par value, according to Yahoo Finance. Last week, Strategy paused its Bitcoin buying for the first time since mid-September and spent $204.9 million buying back STRC instead.
Strategy also faces possible removal from MSCI's widely tracked equity indexes. The index provider finalized a rule this month that treats companies whose balance sheets are dominated by a single asset as ineligible, and will publish the list of affected companies on November 11.
