Strategy Raises STRC Dividend to 10.75% as Preferred Stock Trades Below Par

Strategy (MSTR) announced on Monday a 25-basis-point increase in the dividend rate for its STRC preferred series, bringing it to 10.75%. This marks the fourth hike since the IPO launch in late July.

STRC, nicknamed “Stretch,” is a perpetual preferred stock offering short-duration exposure with high yield. The 10.75% annual dividend is paid monthly in cash and is adjusted regularly to encourage trading near the $100 par value and limit price volatility.

Originally priced at $90 with a 9% dividend at IPO, STRC saw two increases to 10.25% but still fell short of par. A third hike temporarily pushed the price to $100, but declines in bitcoin and Strategy’s common stock caused STRC to fall as low as $90 during November’s market panic, prompting the latest increase. At press time, STRC was trading at $98.43.

The dividend update coincides with news of a $1.44 billion cash reserve earmarked for funding perpetual preferred dividends. The total annualized payout for all perpetual preferred shares is roughly $800 million. With $59 billion in bitcoin reserves, the company reports 74 years of dividend coverage, though the $1.44 billion cash buffer is expected to be the main source for near-term payments.