Strategy Inc. kept the annual dividend rate on its STRC preferred stock at 12% for August 2026, even though the Nasdaq-listed security ended July more than 10% below its $100 stated amount. Summary 12% annualized dividend remains unchanged for August despite STRC closing July at $89.46 per share. $3.75 billion reserve covers roughly 2.1 years of preferred dividends and debt interest payments currently. Strategy repurchased 288,930 STRC shares below par while retaining $975 million in remaining authorization capacity. The company’s official STRC information page confirms that the variable annualized rate for record dates beginning in August remains 12%. Executive Chairman Michael Saylor promoted the product on Aug. 1 as a way to “stretch your income,” emphasizing its twice-monthly payment schedule. STRC closed at $89.46 on July 31, down $0.25 during the session. At that price, the $12 annualized payout based on the security’s $100 stated amount produces an effective yield of about 13.41%. Because Saylor announced the unchanged rate during the weekend, no post-announcement market reaction will be available until Nasdaq trading resumes. Strategy’s STRC dividend no longer rises automatically Strategy raised STRC’s annual dividend from 11.5% to 12% for record dates beginning in July. The increase followed a sharp June decline that took the shares as low as $71.25 and moved them far below the $100 level the company wants to maintain. However, the company changed its rate-setting policy on June 29. Under the revised framework, management considers STRC’s market price, credit spreads, competing yields, Bitcoin volatility, cash-reserve coverage and the wider capital structure. The filing specifically states that Strategy will not necessarily raise the dividend solely because STRC trades below its stated amount. That policy explains why July’s discount did not produce another 50-basis-point increase. Strategy instead said during its second-quarter results that it would maintain the 12% rate until STRC shows “sustained, healthy trading” near $100. The language describes management’s objective and does not guarantee that the shares will return to par. The decision also prevents Strategy’s cash obligations from rising further while the company attempts to repair demand through other measures. Every additional 50 basis points would increase the annual cash cost across more than $10.46 billion in outstanding STRC stated value. Buybacks now carry more of the price-support burden Strategy has shifted part of its response from dividend increases to preferred-share repurchases. Between July 20 and July 26, the company bought back 288,930 STRC shares for approximately $25 million, paying an average of $86.53 per share. The purchase represented a 13.47% discount to the shares’ stated amount. About $975 million remains under Strategy’s $1 billion preferred-securities repurchase authorization. Management said it intends to purchase more STRC at deeper discounts and reduce its activity as the security approaches $100. The authorization does not require Strategy to spend the remaining amount and has no fixed expiry date. Repurchasing shares below par reduces the number of preferred shares requiring future cash distributions. It also lets Strategy retire $100 of stated value for less than $100. However, buybacks use capital that could otherwise remain available for dividends, debt interest or Bitcoin purchases. As previously reported, Strategy funded its first $25 million STRC repurchase while increasing its U.S. dollar reserve and keeping Bitcoin purchases paused. The company raised much of that liquidity through sales of MSTR common stock rather than new STRC issuance. The $3.75 billion reserve supports the 12% payout Strategy reported a $3.75 billion U.S. dollar reserve as of July 26. The company said that amount covers approximately 2.1 years of expected preferred-stock dividends and interest on outstanding debt. The reserve can only be used for those obligations unless the board approves another purpose. The cash cushion has become more important because Strategy’s preferred-stock commitments have expanded. The company recorded $400.7 million in preferred dividends during the second quarter, compared with $49.1 million one year earlier. It has paid or declared more than $1 billion in cumulative preferred distributions. Strategy also reported an $8.22 billion second-quarter net loss, driven mainly by an $8.32 billion unrealized loss on its Bitcoin holdings. The accounting loss did not represent an equivalent cash outflow, but the preferred dividends must be paid in U.S. dollars. The company has therefore authorized Bitcoin sales to refill the reserve, cover dividends and interest, or finance approved security repurchases. Strategy had sold approximately $218.4 million of Bitcoin during 2026 through July 26 to fund part of its preferred obligations. As crypto.news reported, Strategy held 843,775 BTC at an average acquisition cost of about $75,476 as of July 26. The company valued that position at $54.77 billion using Bitcoin’s July 27 market price, compared with its $63.69 billion original cost. STRC holders receive two payments each month STRC moved from monthly to semi-monthly distributions after shareholders approved the change in June. Record dates now fall on the 15th and final day of each month, with payments generally following around 15 days later. Strategy has already declared a payment of $0.50 per share for Aug. 15 to investors recorded as shareholders on July 31. The company’s website lists the 12% rate for August record dates, but future cash distributions still require board or committee approval and are not guaranteed. For U.S. federal tax purposes, Strategy expects the current payments to be treated as returns of capital to the extent of an investor’s tax basis. That is the company’s expectation rather than a guarantee of each shareholder’s treatment, and Strategy advises investors to seek tax guidance based on their own circumstances. STRC is also unsecured. Strategy states that its preferred securities are not collateralized by its Bitcoin holdings and only hold a preferred claim on the company’s residual assets. The company further warns that STRC is not a bank deposit, is not FDIC-insured and does not carry the same protections as Treasury securities or money-market funds. What happens next for STRC and Strategy Chief Executive Phong Le said management’s objective is for STRC to trade between $99 and $100 “over time.” Strategy has not provided a deadline for reaching that range, and the shares’ $89.46 closing price shows that the market continues to demand a yield above the stated 12% rate. The next confirmed event is the Aug. 15 distribution. Investors will then watch Strategy’s next monthly rate decision, further STRC repurchases and weekly SEC disclosures covering common-stock sales, Bitcoin transactions and changes to the dollar reserve. Saylor separately posted “Bitcoin Drive engaged” on Aug. 2 alongside the company’s treasury chart. The message may fuel expectations of a new purchase disclosure, but the post does not confirm that Strategy bought Bitcoin or reversed its recent pause. An SEC filing or company announcement would be needed to verify any transaction. As of then, Strategy is relying on its existing 12% rate, twice-monthly payments, cash reserves and discounted repurchases rather than offering STRC investors another dividend increase.
