Strategy declares daily STRC dividends for November

Strategy, the largest corporate holder of bitcoin, has declared cash dividends on its STRC preferred stock for every calendar day of November — a switch from monthly to daily payouts that still needs shareholder approval, according to a Form 8-K filing reported by Cointelegraph on Friday. STRC was trading at $99.32 at 1:36 pm UTC, slightly below its $100 par value.

What Strategy announced

• Daily record dates: the board declared a dividend for each day from November 1 to November 30, with each one payable on the business day after its record date. The first payments are scheduled for November 2.
• Conditional: the declaration only takes effect if shareholders approve the related amendments and they come into force.
• Rate unchanged: STRC's annualised dividend stays at 12% for November. Strategy said management will keep recommending that rate until the stock shows "sustained, healthy trading near $100 per share."

Why it matters

STRC is one of the main tools Michael Saylor's company uses to raise money for bitcoin purchases. When it trades below par, issuing new shares raises less cash, so Strategy has been working to pull the price back towards $100 — daily payouts are meant to make the security more attractive to income investors.

The company has also been spending heavily on the stock itself. In the week ending October 4 it bought back $176 million of STRC, more than six times the $28 million it spent on bitcoin that week. Last week it added 250 BTC for $21.5 million, lifting its holdings to 848,250 BTC. In June, Strategy adopted a capital framework that allows it to sell bitcoin to fund dividends and raised STRC's rate to 12%.

Context

Pressure on bitcoin treasury companies is rising: index provider MSCI has just adopted rules that could exclude Strategy from its indexes, and France's Capital B reported a $78 million first-half loss driven by a bitcoin impairment. If you are weighing indirect exposure against owning coins, see bitcoin ETF vs buying bitcoin.