Strategy Maintains STRC Dividend at 12% for August, Breaking From Customary Hike Pattern
Key Takeaways
- •Strategy maintained the STRC dividend rate at 12% for August, breaking from its customary pattern of increasing the payout when shares trade well below the $100 par value.
- •STRC shares recovered from a June low of $71 to approximately $89.46 in July, aided by a prior 50 basis point dividend hike on July 1 and bitcoin price stabilization.
- •The 12% dividend rate places STRC among the highest-yielding perpetual preferred stock issues from a U.S. publicly listed company.
- •CEO Phong Le identified the company's objective as having STRC trade at $99 to $100 over time, though Strategy has no contractual obligation to raise the dividend.
- •Investors had expected a potential increase of up to 50 basis points this month based on Strategy's historical behavior of raising payouts during prolonged periods below par.
Strategy Maintains STRC Dividend at 12% for August, Breaking From Customary Hike Pattern
Strategy (MSTR) is holding the dividend on its high-yielding preferred stock, STRC, at 12% for August, despite the shares continuing to trade well below their par value of $100.
No Hike This Month
Holders of STRC will not see a dividend increase in August. Led by Executive Chairman Michael Saylor, the company chose to maintain the current 12% payout, breaking from what had become a customary pattern of raising the dividend whenever the stock traded sizably below par.
STRC investors may have been expecting an increase of as much as 50 basis points, given that Strategy has historically raised the payout any time the shares spent a significant portion of the previous month trading materially below the $100 par value. The 12% dividend rate on STRC already places it among the highest-yielding perpetual preferred stock issues from a U.S. publicly listed company, a reflection of the premium investors demand given Strategy's heavy reliance on bitcoin as its primary treasury asset.
Prior Dividend Increase and STRC Recovery
As recently as July 1, Strategy lifted the STRC dividend by 50 basis points following a steep plunge in June that saw the preferred stock fall to as low as $71. That increase, combined with Strategy's sale of some bitcoin to fund dividend payments and a degree of stabilization in the price of bitcoin, helped STRC rebound during July to its current level of $89.46 — still notably below par.
Corporate Objective
CEO Phong Le stated this week that Strategy's corporate objective is for STRC to trade at $99–$100 over time. The company, however, is under no contractual obligation to raise the dividend and elected not to do so this month.
In the past, Strategy has consistently raised the STRC payout whenever the stock traded sizably below par for a meaningful period. The decision to hold steady in August marks a departure from that established pattern, leaving STRC holders to weigh whether the current yield adequately compensates for the persistent discount to par and the instrument's sensitivity to bitcoin price movements.