Strategy Holders Approve Daily Preferred Dividends

Strategy’s shareholders have approved a change that will let four of its preferred stocks pay dividends every business day. The company’s STRC preferred moves to daily dividends on 1 November, and its STRF, STRK and STRD preferreds follow on 1 January 2027, according to a Form 8-K filed on 28 October.

The vote took place at a special meeting on 28 October. The filing says that, “based on preliminary voting results, the requisite vote was obtained”. Strategy said on X that “99.3% of votes cast were in favor”, and Michael Saylor posted the same text.

What shareholders approved

Under the amended terms, each of the four preferreds will have “a dividend record date on every calendar day, including weekends and market and bank holidays”, with payment on the next business day. The changes still have to be filed and take effect. The four are the Variable Rate Series A Perpetual Stretch (STRC), 10.00% Series A Perpetual Strife (STRF), 8.00% Series A Perpetual Strike (STRK) and 10.00% Series A Perpetual Stride (STRD).

Only holders of Strategy’s common stock voted. The proxy statement says preferred holders had no vote on these proposals, and that approval needed a majority of the voting power of all outstanding common stock. A fifth series, the 10.00% Series A Perpetual Stream (STRE), is not covered.

STRF, STRK and STRD pay quarterly today, and STRC pays twice a month. The proxy says the first daily payments on STRF, STRK and STRD are due on 4 January 2027, for record dates of 1, 2 and 3 January. The new terms also let Strategy declare extra business days for paying dividends, after giving notice. The proxy says that “could permit the Company to pay dividends on additional days, including potentially seven days a week”.

What changes for STRC holders in November

Strategy has already set out November. In an 8-K filed on 16 October, it said the board had declared STRC dividends for every calendar day from 1 to 30 November, at a rate of 12.00% a year. Each day’s dividend is $0.03 or $0.04 a share, adding up to $1.00 for the month. Those dividends depended on the vote passing by 31 October and the new STRC terms taking effect by 12:01am Eastern time on 1 November. If both happen, the semi-monthly dividend due on 15 November will not be paid, so holders will never receive both.

Weekends are where it gets tricky. The 28 October filing works through 6, 7 and 8 November, a Friday, Saturday and Sunday. The central depository, DTC, will treat all three record dates as Friday 6 November, which is also the ex-dividend date on Nasdaq for all three. All three are paid on Monday 9 November. On the board’s schedule that is $0.04 for 6 November plus $0.03 for each weekend day, or $0.10 a share by TSN’s arithmetic. Because US trades settle the next business day, a buyer on Friday gets none of those three dividends, and a seller on Friday still gets all three. Payments also slip for US holidays: dividends for 10 and 11 November are both paid on 12 November because 11 November, Veterans Day, is not a business day.

The filing warns that entitlement “may differ” for shares held outside DTC or traded on venues other than Nasdaq that open at weekends, and that brokers may treat the dividends differently. “Investors should consult their brokers,” it says.

Why Strategy wants a dividend every day

The proxy gives the board’s reasons. Daily payments cut the time between earning a dividend and receiving it, so holders can reinvest sooner, “including back into the Preferred Stock”. Less dividend should be built into the share price at any one time, which Strategy says could improve liquidity and reduce price swings around record dates. For STRC in particular, the board says the change supports its intention to keep the stock trading “at or close to its stated amount of $100 per share”. The 16 October filing adds that management will recommend keeping the 12.00% rate “until STRC has demonstrated sustained, healthy trading near $100 per share”.

The aim is plain. Strategy wants these preferreds to behave more like a cash product with a steady daily yield, which would make them easier to sell. The proxy says stronger demand could help the company raise preferred capital “more efficiently and on more favorable terms”, which in turn supports its bitcoin buying. That is the funding model TSN has covered in Strategy’s weekly bitcoin and buyback filings and in how Saylor built the bitcoin treasury. Rivals are using the same tool, such as Strive with its SATS preferred stock.

There is a cost. A dividend every day means more payments, more record dates and more chances for brokers and venues to treat holders differently, which is why the filing lists the systems of Nasdaq, DTC, trading venues and brokers among its risks. The weekend example also shows that a Friday buyer can miss three days of dividends. The first real test comes on 2 November, when STRC’s first daily payment is due. Separately, index providers are tightening rules for companies that mainly hold assets, with MSCI applying new screens from 30 November.