STRC Daily Dividends: Strategy Sets $1.00 For November, Vote Oct 28

Strategy has declared a dividend for every day of November on its STRC preferred stock. The board acted on October 15, and an 8-K filed on October 16 sets out the amounts. Whether the STRC daily dividends get paid depends on a shareholder vote on October 28.

Item 8.01 of the 8-K, with the declaration and the 12.00% rate. Source: SEC EDGAR.

What the STRC daily dividends would pay

Each calendar day from November 1 through November 30 gets its own record date. A holder of record at 5:00 p.m. New York time receives the cash on the next business day. The first payment is dated November 2 and the last December 1.

Every daily amount is either $0.03 or $0.04 a share. Going through the table, twenty days pay $0.03 and ten pay $0.04. The filing totals the STRC daily dividends at $1.00 for the month.

That total matches a 12.00% annual rate on a $100 share, which is the price level management says it wants STRC to hold. The filing adds that management will recommend keeping the rate at 12.00% until the stock has shown sustained, healthy trading near $100.

The daily schedule from the filing, with record dates, payment dates and amounts. Source: SEC EDGAR.

A few payments land together, since weekends, Veterans Day and Thanksgiving are not business days. Record dates of November 6, 7 and 8 all pay on November 9, and November 20 to 22 pay on November 23. The 27th through the 29th pay together on November 30.

The October 28 vote behind the dividends

Strategy has called a special meeting for October 28 at 10:00 a.m. Eastern. Stockholders will consider amending the certificate of designations for STRC and some other preferred series. The change would create a regular record date on every calendar day.

The dividends carry a condition with two parts. Holders must approve the amendment by 5:00 p.m. New York time on October 31. After that, the amended certificate has to be filed and in effect by 12:01 a.m. Eastern on November 1. Miss either step and the daily dividends are not payable.

A payment is already on the books. Strategy declared a dividend on September 30 for payment on November 15, to holders of record on October 31. Should the condition be met, that one is dropped and the daily dividends take its place.

If the vote fails, the reverse applies. The November 15 dividend is paid. Strategy then expects to keep declaring STRC dividends twice a month under the existing certificate, subject to board approval. The filing says both sets of payments can never become payable together.

Tax treatment and what the filing leaves open

As of October 16, Strategy expects the November payments, if made, to count as a non-taxable return of capital up to a holder's tax basis. The company tells shareholders to consult their own tax advisers. That is an expectation, and the filing does not call it final.

The filing does not give the vote count needed or any forecast of the result. It also does not say whether the other preferred series covered by the amendment would move to daily payments in November. Strategy's additional proxy materials, filed the same day, repeat the declaration for holders who vote.

Strategy is not the only bitcoin treasury company leaning on preferred stock. TOCE covered Strive's plan for a 15% SATS preferred earlier this week. This article reports the terms in Strategy's filing. It does not forecast how the October 28 meeting will go, or whether the STRC daily dividends will start in November.