Strategy proposes daily dividends on four preferred shares

Strategy proposed paying dividends every calendar day on four preferred share series that finance its Bitcoin purchases, with payouts to occur the next business day for STRF, STRC, STRK and STRD. The proposal did not specify an effective date, daily record dates or the series-level approvals required.

The company disclosed the plan via the @saylor account on Friday. An August 31 declaration still sets quarterly payments for STRF, STRK and STRD and twice-monthly payments for STRC beginning September 16; the daily proposal has not replaced those declared dates. The company has not indicated whether the board has approved daily payments or whether holders must vote to amend any series’ terms.

STRF, STRC and STRK are cumulative preferred shares, meaning unpaid dividends can accrue as arrears under their terms. STRD is noncumulative, so missed dividends do not become arrears claims. STRF’s declared annual rate is 10% with quarterly cadence. STRC was set at an annualized 12% for semi-monthly periods in the August 31 filing. STRK pays 8% annually with quarterly cadence and may be paid in cash, Strategy common shares or a combination. STRD carries a 10% annual rate with quarterly cadence and noncumulative rights.

At the close of trading on September 24, STRF traded above $100, STRC traded just below $100, and STRK and STRD traded in the low $70s. Strategy’s filings list a legal par value of $0.001 for the preferred securities; some documents reference a $100 liquidation preference for certain series.

Under the August 31 declaration, holders of record on September 15 were due specified amounts on September 30: $2.50 per STRF share, $2 per STRK share and $2.50 per STRD share, and a $0.50 STRC payment. A second $0.50 STRC payment was due October 15 for holders of record on September 30. STRC’s earlier change from monthly to twice-monthly record and payment dates took effect after majority approval and did not change the company’s overall dividend obligation.

Strategy reported its USD Reserve, designated for preferred dividends and debt interest, at $5.04 billion as of September 20, and a separate USD Cash balance of $1.05 billion available for broader treasury uses. In the prior week the reserve funded about $57.4 million in preferred dividends and interest. The company used USD Cash to repurchase $174 million of STRC and to buy 950 Bitcoin for roughly $75.7 million, and it reported $875.1 million of remaining authority to repurchase preferred shares.

Any change to a daily payment calendar would require amended terms, board actions and, where applicable, holder approvals before taking effect. The proposal as disclosed sets a payment timetable but does not include finalized amended terms, approvals, or an effective date.