Strategy Seeks Shareholder Approval for Daily Preferred Stock Dividends

Strategy, a company that has made waves in the crypto space with its 'digital credit' strategy, is seeking shareholder approval to move four of its preferred stocks to daily dividend payments. This proposal comes after fellow Bitcoin treasury company Strive became the first public company to adopt daily dividends in May.

The new schedule would make every calendar day a record date for dividend payments, with the corresponding payment made on the next business day. STRC, the first of these preferred stocks, is expected to start making daily payments on November 2, followed by STRF, STRK, and STRD in January.

Strategy CEO Phong Le attributed the decline of STRC's price earlier this year to an unexpected surge in leverage in the market. Le said that some investors borrowed against their Bitcoin holdings at lower rates to buy STRC, capturing the spread between their borrowing costs and STRC's dividend yield. However, when Bitcoin's price fell, these investors faced pressure to either add more collateral or sell STRC.

Strategy is seeking to prevent another such unwind by maintaining a strong US dollar reserve and having a policy that allows the company to repurchase STRC when it trades below its $100 stated amount.