Strategy lifts STRC “Stretch” preferred‑stock dividend to 11.50%
The Bitcoin‑focused treasury firm raises the yield on its perpetual preferred shares by 25 basis points, while continuing to pivot its financing model toward preferred capital amid a steep decline in Bitcoin’s market price.
Announcement
On Sunday, Strategy’s chairman Michael Saylor posted on X that the dividend on the company’s STRC preferred stock—branded “Stretch”—will increase to 11.50% for the March 2026 series, up from the prior 11.25% rate. The change, confirmed on Strategy’s website on Friday, reflects a monthly adjustment mechanism designed to keep the share price near its $100 par value and to dampen price volatility. The dividend is paid monthly, with the next distribution scheduled for 31 March 2026 to shareholders of record.
Structure of STRC
- Perpetual security – the company has no obligation to repurchase the shares at a set date.
- Variable yield – the rate is revisited each month, allowing Strategy to respond to market conditions and trading activity.
- Monthly payouts – investors receive cash each month rather than a single annual payment.
Financing shift
In February, CEO Phong Le signaled a strategic move away from issuing common equity to fund Bitcoin acquisitions, opting instead for a larger issuance of preferred shares such as STRC. He explained that the “stretch” and other perpetual preferreds raised roughly $7 billion last year—about a third of the entire preferred‑stock market— and that this financing structure will play a bigger role throughout 2024.
Bitcoin accumulation continues
Despite Bitcoin’s 23.2 % decline year‑to‑date and a roughly 50 % drop in price since October, Strategy has kept buying the cryptocurrency. The firm’s most recent purchase, announced in mid‑February, added 592 BTC (valued at just under $40 million) and brought its total holdings to 717,722 BTC, marking the company’s 100th individual acquisition. The average purchase price for Strategy’s treasury remains around $76,020 per Bitcoin, well above current market levels.
Financial backdrop
- Q4 2025 loss: Strategy reported a net loss of $12.4 billion, prompting a 13 % slide in its common‑stock price to about $107 per share.
- Common‑stock performance: After peaking at $543 in November 2024, the stock has slipped more than 75 % and closed the prior trading session near $129.50.
- Industry trends: The Bitwise Bitcoin Standard Corporations ETF (OWNB), which tracks public firms with sizable Bitcoin balances, is down 16.1 % year‑to‑date, reflecting broader market pressure on Bitcoin‑treasury companies.
Analysis
The modest dividend bump on STRC appears aimed at bolstering demand for the security as the share price drifts below its $100 par value. By adjusting the yield monthly, Strategy can offer a relatively high, stable cash flow that may appeal to yield‑seeking investors, especially in a market where equity valuations are under pressure.
The pivot toward preferred capital could also help the firm limit dilution of existing common shareholders while securing financing at a known cost. Preferred dividends are tax‑deductible for the issuer, potentially improving cash‑flow economics compared with straight equity issuance.
However, the underlying driver of Strategy’s growth—its Bitcoin treasury—remains vulnerable to price swings. With the asset’s market price now significantly under the firm’s average acquisition cost, the high‑yield preferred may act as a hedge, yet the overall balance sheet health is still contingent on Bitcoin’s long‑term trajectory.
Key takeaways
- Yield increase: STRC’s dividend rises to 11.50% for the March 2026 series, a 25‑bp uplift.
- Perpetual, variable security: Monthly rate adjustments seek to keep the share price near par and temper volatility.
- Financing shift: Strategy is moving from common equity to preferred‑stock issuances to fund Bitcoin purchases.
- Continued Bitcoin buying: The company added 592 BTC in February, reaching a total of 717,722 BTC despite a 23 % drop in Bitcoin’s price YTD.
- Financial pressure: A $12.4 billion Q4 loss and a steep decline in common‑stock value underscore the challenges facing Bitcoin‑treasury firms.
The dividend raise may provide short‑term investor appeal, but Strategy’s long‑term outlook will continue to hinge on Bitcoin’s market performance and the company’s ability to fund its treasury without excessive dilution.
Source: https://cointelegraph.com/news/strategy-raises-strc-dividend-11-50?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
