Strategy ($MSTR) held the STRC preferred dividend at 12% for August despite a 10-11% discount to par. The company signaled a shift toward buybacks and reserve management over further rate hikes.
Strategy (NASDAQ:MSTR), the Bitcoin treasury company run by Executive Chairman Michael Saylor, confirmed it will keep the annual dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) at 12% for the August period. The shares still trade at a discount to their $100 stated par value.
STRC launched in July 2025 with a 9% rate. The company raised it several times over the first year as it tried to support trading near par. The rate hit 12% effective for periods with record dates from July 1, 2026, after a 50-basis-point increase at the end of June.
That increase was part of a broader Digital Credit Capital Framework that also included a strengthened USD reserve policy, repurchase authorizations for preferred and common shares, and a Bitcoin monetization program to support liquidity without selling long-term Bitcoin holdings.
In prior months, Strategy often raised the payout when STRC spent significant time well below par, aiming to attract demand and push the price back toward the $99-$100 range management sees as the target. The shares dipped to around $71 in June, then recovered somewhat in July, closing near $89.46 at month-end. That's still roughly 10-11% below par.
Despite the discount and market expectations of another 50-basis-point hike, the company held the rate unchanged. CEO Phong Le has said the goal remains for STRC to trade steadily in the $99-$100 zone over time.
The revised policy framework says rate decisions will consider trading levels, market yields, Bitcoin price and volatility, reserve coverage, and overall capital structure. Strategy has indicated it will not automatically increase the dividend just because the stock trades below its stated amount.
The preferred shares pay cash dividends semi-monthly. At 12%, that's $12 annually per share based on the $100 stated amount, though the effective yield for buyers at discounted market prices is higher.
Strategy has also been buying back STRC shares at a discount through a $1 billion repurchase program for digital credit securities. The company has built a substantial USD reserve to cover preferred dividends and interest obligations, providing a buffer that reduces the need for immediate Bitcoin sales or new equity issuance when conditions are less favorable.
ATM issuance of new STRC shares has been constrained while the price sits below par, limiting one channel previously used to fund additional Bitcoin purchases. By holding the dividend steady rather than escalating further, Strategy signals a shift toward repurchases, reserve management, and patient capital allocation to restore confidence and liquidity in STRC.
Management has described the current phase as refining its model for digital credit as an asset class, aiming for stable demand, high liquidity, and low volatility near par value. Success in bringing STRC closer to its target would reopen more efficient capital-raising avenues to support the Bitcoin strategy over the longer term.
The Alpha Score for MSTR sits at 27/100, labeled Weak, in the Technology sector. Bitcoin price action and Strategy's execution of its repurchase and reserve policies will influence whether the preferred shares regain their intended trading range without additional rate adjustments.
Saylor confirmed the August rate via a post on X: "Stretch Dividend Rate maintained at 12.00% for August 2026."
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