Key Takeaways
- Strategy’s STRC preferred shares hit $100 on Wednesday for the first time since May, following months of share buybacks and a recent shift to daily dividends.
- STRC offers a 12% annualized dividend yield, with daily accruals beginning Nov. 1 following shareholder approval.
- Trading above $100 allows Strategy to potentially issue additional STRC shares to raise funds for bitcoin purchases, reversing months of buybacks aimed at supporting the stock’s price.
The stock touched $100 during Wednesday’s trading session, according to Google Finance data, continuing a recovery that has seen the shares climb from a June low of $71.25. The rebound follows months of aggressive share repurchases and adjustments to STRC’s dividend structure aimed at keeping its market price close to $100.
The milestone is particularly important for Strategy because trading at or above $100 allows the company to resume issuing new STRC shares through its at-the-market offering program, potentially raising additional capital to purchase bitcoin to add to its $68 billion BTC stockpile.
STRC, officially known as Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, is a perpetual preferred security with no maturity date. Unlike Strategy’s common shares (MSTR), which fluctuate substantially alongside bitcoin prices, STRC is designed to provide relatively stable income through cash dividends.
The shares currently carry a 12% annualized dividend rate, equivalent to $12 per share annually at their $100 stated value. Strategy can adjust the rate monthly to encourage trading near that benchmark, although the company has indicated it intends to maintain the current rate until the stock demonstrates sustained stability around $100.
As previously reported by Bitcoin.com News, Strategy shareholders approved the transition to daily dividends on Oct. 28, with 99.3% of votes cast supporting the change, according to preliminary results shared by Executive Chairman Michael Saylor.
The new system took effect Nov. 1, with the first cash distributions beginning Nov. 2. Shareholders now accrue dividends every calendar day, including weekends and holidays, with payments generally made on the following business day.
Strategy previously paid STRC dividends twice monthly, having shifted from monthly distributions earlier this year. The company argues that daily payments can reduce price fluctuations associated with dividend dates, improve liquidity, and make the shares more attractive to income-focused investors.
STRC’s Return to $100 Follows Sizable Buybacks
The return to $100 follows substantial intervention by Strategy to support STRC’s market price.
Bitcoin.com News reported last week that Strategy spent approximately $205 million repurchasing STRC shares rather than acquiring additional bitcoin. Between Sept. 28 and Oct. 25, the company repurchased roughly $2 billion in STRC shares, bringing its year-to-date repurchases to approximately $2.04 billion.
Those purchases reduced the number of outstanding preferred shares and the company’s future dividend obligations.
Strategy has maintained a policy of repurchasing STRC below $100 while avoiding new issuance beneath that threshold. Once the stock trades above $100, the company can reverse that process, selling additional preferred shares to investors and potentially directing the proceeds toward bitcoin acquisitions.
However, crossing $100 does not automatically trigger new issuance or bitcoin purchases. Such transactions remain subject to management decisions and market conditions.
Strategy’s latest quarterly results showed that the company had accumulated approximately $5.1 billion in U.S. dollar assets as of Oct. 25, including reserves intended to support preferred dividends and debt payments.
The recovery of STRC to its target price could therefore mark a transition from months of defending the preferred stock’s value toward renewed fundraising for Strategy’s bitcoin accumulation strategy.
