STRC Preferred Stock Dividend Rate Held at Record-High 12% Despite Trading Below Par

Strategy has confirmed that its Stretch (STRC) preferred stock will continue to pay a 12% annualized dividend in August 2026, even after the security closed July at roughly 10-11% below its $100 par value.

The STRC preferred stock has been paying out dividends since its launch in July 2025, and its rate has increased by 3 percentage points over that time. The ratchet mechanism used to increase the dividend rate is designed to push the price of STRC back towards its par value and reduce volatility, but it has not had the intended effect.

STRC closed at $89.46 on July 31, down from a previous close of $89.50, leaving the stock significantly below par despite the record-high dividend rate. This has forced Strategy to pause new STRC issuance through its ATM program, limiting the company's ability to keep adding to its Bitcoin holdings using that specific funding channel.

Analysts have warned about the long-term risks of the ratchet mechanism, which can only move in one direction and creates a structure with a finite number of cycles. Strategy has built financial buffers to offset these concerns, but retail investors hold an estimated 83% of outstanding STRC shares, making them more prone to reactive selling during downturns.