Strategy, the company formerly known as MicroStrategy, is asking shareholders to approve paying dividends on all four of its preferred stock series every business day, a shift the board says is designed to keep the instruments trading close to their $100 stated value. The proposal went out in a preliminary proxy statement filed with the SEC on September 25, with a virtual special meeting set for October 28.
The amendments would cover STRF, the 10.00 percent Series A Perpetual Strife Preferred Stock; STRC, the variable rate Series A Perpetual Stretch Preferred; STRK, the 8.00 percent Series A Perpetual Strike Preferred; and STRD, the 10.00 percent Series A Perpetual Stride Preferred. Together these instruments form the core of what the company calls its Digital Credit platform, the preferred-equity machinery that funds its bitcoin purchases.
What changes and what does not
The economics stay the same. Each calendar day would become a record date, with the related dividend payable on the next business day, but the annual rates and total dividend obligations do not change. What changes is cadence: STRF, STRK and STRD currently pay quarterly and would move to daily accrual, roughly 90 times more frequently. STRC pays twice a month and would move to daily, about 15 times more frequently.
Daily amounts would be rounded down to the nearest cent, except for the 15th and month-end record dates, which would be left unrounded so each semi-monthly period accrues in full. The board or an authorized committee still has to declare each dividend, and the filings are careful to say that declaring one does not obligate the company to declare the next.
The transition is staged. STRC would keep its current schedule through October, with a final semi-monthly dividend payable October 31, then switch to daily payments starting November 2 for holders of record on November 1. STRF, STRK and STRD would stay quarterly through December, with the first daily dividends on January 4, 2027. The board has set September 25 as the record date for the special meeting, and Proposal 1 needs approval by a majority of the voting power of all outstanding common stock. A second proposal allows meeting adjournments if votes fall short.
There is a contingency built in for the vote itself. Because the meeting comes before the October 31 STRC payment, the company expects to declare alternative dividends in advance for the November 1 to 15 window: daily-schedule dividends if the proposal passes and the amended certificate becomes effective, or a dividend under the existing semi-monthly schedule if either condition fails. Either way the applicable rate stays the one set for the October 16 to November 15 period.
Why daily dividends
The company’s investor deck is direct about the motive: stabilize the price, dampen cyclicality, drive liquidity and grow demand. STRC in particular has traded below its $100 par at times, and the company has already tried shorter cycles. Shareholders approved semi-monthly payments on STRC in a June 8 vote with 97.5 percent support, and Strategy has paid $255 million in STRC semi-monthly dividends since. That earlier change kept the economics identical too, and it passed with almost no opposition.
The logic is that the gap between earning a dividend and receiving it creates price drag. A buyer of STRC today does not capture the next semi-monthly payment unless the record date falls right, so the market prices that uncertainty in. Daily record dates shrink the gap to one business day, which the company believes should pull the trading price toward par. CoinDesk reported that the STRC proposal specifically aims to bring the stock back toward $100.
There is a mechanical detail that shows how far the company is thinking ahead. The amended definitions of business day are written to give Strategy flexibility to accommodate paying dividends seven days a week in the future, which suggests daily payments are a step, not a destination.
The bigger picture
Strategy’s preferred stock has become one of the largest fixed-income-style instruments in crypto finance, and its health matters beyond the company’s own balance sheet. Other bitcoin treasury companies have copied the structure, and the preferreds are held by income-focused investors who would not touch the common stock. If daily dividends make the instruments trade closer to par, it lowers Strategy’s effective cost of raising more capital through the same channel, which in turn feeds the bitcoin buying machine the whole structure exists to fund.
The proxy also notes the amendments could benefit common stockholders by increasing demand and liquidity in the preferreds, expanding the company’s ability to access preferred equity capital on better terms for its bitcoin treasury strategy. Critics of the model have long warned that the preferred stack is a leveraged bet on bitcoin’s price, and nothing in this proposal changes that exposure. What it changes is the plumbing, and plumbing, in credit markets, is often where the real signals show up first. A company that needs to shorten its dividend cycle to keep its preferreds at par is telling you something about where those instruments have been trading.
The timing also lands in a bond market that has been anything but calm. Long-dated Treasury yields have pushed to levels last seen in 2004 this week, and anything offering a fixed double-digit yield competes for the same dollar. Strategy’s pitch to preferred holders has always been yield plus bitcoin-linked upside optionality, and in a rising-rate environment the yield half has to work harder.
Shareholders vote on October 28. If approved, the amendments take effect when the amended certificates of designations are filed and become effective in Delaware. Given the June vote on semi-monthly STRC payments passed with 97.5 percent of shares cast in favor, the odds of approval look strong, though the quarterly-to-daily jump for the other three series is a bigger change than the last one was.