Strategy’s preferred stock tracker, STRC, ended July trading well below its $100 par value, but management signaled that the company’s next preferred dividend rate will not rise. Executive chairman Michael Saylor said the August dividend will remain at 12%, continuing a payout level that was set after a June performance dip.
In a Saturday post on X, Saylor confirmed the dividend will hold at 12% for August. He also noted the company will keep its semi-monthly payment cadence for the second straight month after shareholders approved that change in June, following the earlier decision to increase the dividend by 50 basis points to 12%.
Key takeaways
- Strategy’s executive chairman said the August STRC dividend will remain at a 12% rate, not increase.
- STRC has continued to trade below its $100 par value throughout July, despite a monthly price rebound that began after the June dividend hike.
- Management reiterated a longer-term objective for STRC to trade near $99–$100, without specifying a timeline.
- Strategy reported building a large cash reserve—cited as $3.75 billion—to support preferred stock payouts and related obligations.
Dividend holds at 12% as preferred shares stay below par
Although STRC shares did not reach par in July, the stock did gain momentum over the month. The shares closed at $89.46 on Friday, up 5.42% for the month that started with the dividend adjustment.
Earlier, management had lifted the dividend rate in response to weak performance in June—raising it by 50 basis points to 12%. After that change, Strategy’s preferred payout strategy moved toward semi-monthly distributions, a structure that takes effect for the second month in August after the June shareholder vote.
Trading activity on Friday was also notably lighter than typical: volume was about two-thirds of the Nasdaq-listed shares’ daily average, according to the figures referenced in the report. That detail matters because it suggests the month’s rebound did not coincide with a surge in participation, even as investors processed the dividend update.
Management’s $99–$100 target meets a lower-than-par reality
Even as the next dividend stays flat, Strategy’s leadership continues to frame STRC around a valuation target. On Friday, CEO Phong Le reiterated that management’s “corporate objective” is for STRC to trade at $99–$100 over time, without adding specifics on when that goal might be reached.
That position is important to read in context: shareholders were told the dividend rate would not increase in August, even after the company adjusted payouts earlier in the quarter. Investors looking for signals that STRC might close the gap toward par have therefore had to balance two competing inputs—management’s longer-term pricing objective and the near-term decision to keep the dividend at the same level.
Cash reserve and buybacks aimed at supporting payouts
While the dividend rate message was unchanged, Saylor’s social-media activity pointed to continued capital management efforts tied to Strategy’s Bitcoin treasury strategy. On Sunday, he posted “Bitcoin Drive engaged,” accompanied by a familiar chart of Strategy’s BTC buying activity as tracked by Saylortracker.com.
The emphasis on liquidity and coverage aligns with what Strategy disclosed in its latest reporting. The company recently reported an $8.22 billion second-quarter net loss, driven primarily by an $8.32 billion unrealized loss on its Bitcoin holdings as the cryptocurrency’s price declined during the quarter.
Against that backdrop, Strategy said it has built a $3.75 billion cash reserve intended to support preferred stock payouts following the launch of its BTC monetization program. In the same vein, the company described a $3.75 billion U.S. dollar reserve sufficient to cover more than two years of preferred dividend payments and related interest obligations.
Strategy also disclosed that it repurchased $25 million of its STRC preferred shares at a discount to par and said it intends to keep buying the securities while they trade below $100. For investors, the practical takeaway is straightforward: management is pairing a coverage plan with an active buyback strategy, presumably to reduce pressure on valuation while the preferred shares trade under par.
However, the gap between par value and the prevailing market price remains the key issue. Management’s stated intent to buy more when the shares trade below $100 suggests the company believes the market offers an entry point—but without a near-term dividend increase, investors will likely focus on whether buybacks and reserve policy can translate into sustained movement toward the $99–$100 trading range.
What to watch next for STRC holders
With the August dividend rate confirmed at 12% and STRC still trading below $100 par, the next signal for holders will likely come from any further updates on Strategy’s Bitcoin treasury actions and whether cash-reserve coverage and buybacks continue at a pace that supports improving market pricing. Investors should also watch whether management provides clearer timing around its $99–$100 objective, since it currently remains framed as a long-term goal rather than a defined schedule.
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