Strategy Inc. has kept the annual dividend rate on its STRC preferred stock at 12% for August 2026, even though the Nasdaq-listed security closed July over 10% below its $100 stated value.
Summary
- The annualized dividend of 12% remains unchanged for August, despite STRC concluding July at $89.46 per share.
- A $3.75 billion reserve is adequate to secure approximately 2.1 years of preferred dividends and interest payments.
- Strategy repurchased 288,930 STRC shares below par and currently has $975 million left in authorization capacity.
The official STRC information page confirms that the variable annualized rate for record dates beginning in August remains at 12%. Executive Chairman Michael Saylor promoted this investment opportunity on Aug. 1, emphasizing its bi-monthly payment structure as a means to “stretch your income.”
On July 31, STRC closed at $89.46, seeing a decline of $0.25 during the session. At this price, the $12 annualized payout based on the $100 stated amount generates an effective yield of approximately 13.41%. Since Saylor announced the unchanged rate over the weekend, there will be no market reaction until Nasdaq trading resumes.
Strategy’s STRC dividend is no longer subject to automatic increases
Strategy raised STRC’s annual dividend from 11.5% to 12% for record dates starting in July. This increase followed a significant drop in June, which saw shares plummet to as low as $71.25, moving considerably below the target $100 level.
The company revised its rate-setting policy on June 29. Under this new framework, management considers STRC’s market price, credit spreads, competing yields, Bitcoin volatility, cash-reserve coverage, and the overall capital structure. The document indicates that the dividend may not automatically increase just because STRC trades below its stated amount.
This policy explains why July’s discount did not trigger another 50-basis-point rise. Instead, during its second-quarter results, Strategy indicated it would maintain the 12% rate until STRC shows “sustained, healthy trading” close to $100. This terminology reflects management’s aspirations and does not guarantee that shares will revert to par.
The decision also reduces Strategy’s cash obligations while the company looks to rebuild demand through other strategies. An additional 50 basis points would elevate annual cash expenditures across over $10.46 billion in outstanding STRC stated value.
Buybacks are now essential for price support
Strategy has shifted its focus from merely increasing dividends to emphasizing preferred-share buybacks. Between July 20 and July 26, the company repurchased 288,930 STRC shares for about $25 million, with an average price of $86.53 each, yielding a 13.47% discount to the stated amount.
Roughly $975 million remains within Strategy’s $1 billion preferred-securities repurchase authorization. Management plans to buy additional STRC shares at lower prices, limiting purchases as the security approaches $100. The authorization does not obligate Strategy to use the remaining funds and lacks a fixed expiration.
Repurchasing shares below par decreases the number of preferred shares requiring future cash distributions. This approach allows Strategy to retire $100 of stated value for less than $100. However, buybacks consume capital that could otherwise be allocated toward dividends, debt interest, or Bitcoin acquisitions.
As noted previously, Strategy financed its initial $25 million STRC repurchase while bolstering its U.S. dollar reserve and pausing Bitcoin purchases. Much of this liquidity was raised through selling MSTR common stock rather than issuing new STRC shares.
The $3.75 billion reserve supports the 12% payout
As of July 26, Strategy reported a $3.75 billion U.S. dollar reserve, which it claims can cover roughly 2.1 years of anticipated preferred-stock dividends and interest on outstanding loans. This reserve can only be used for such obligations unless alternative use is approved by the board.
This cash reserve has become increasingly important as Strategy’s commitments regarding preferred stock have grown. The company reported $400.7 million in preferred dividends during the second quarter, up from $49.1 million a year prior. Cumulatively, over $1 billion in preferred distributions has been paid or declared.
Strategy also reported an $8.22 billion net loss for the second quarter, primarily due to an $8.32 billion unrealized loss on its Bitcoin investments. This accounting loss does not equate to a cash outflow, but preferred dividends must be settled in U.S. dollars.
To replenish the reserve and meet dividend, interest, or fund approved repurchases, the company has authorized Bitcoin sales. By July 26, Strategy had sold approximately $218.4 million of Bitcoin in 2026 to satisfy part of its preferred obligations.
As previously reported by crypto.news, by July 26, Strategy held 843,775 BTC, with an average acquisition cost of around $75,476. The company valued this holding at $54.77 billion at Bitcoin’s market price as of July 27, compared to its original cost of $63.69 billion.
STRC holders enjoy two payments each month
STRC transitioned to semi-monthly distributions following shareholder approval in June. Record dates now occur on the 15th and the final day of each month, with payments generally made approximately 15 days later.
For Aug. 15, Strategy has announced a payment of $0.50 per share for those listed as shareholders on July 31. The company’s website confirms the 12% rate for August record dates, but forthcoming cash distributions still require approval from the board or committee and are not guaranteed.
For U.S. federal tax purposes, Strategy anticipates that current payments will be categorized as returns of capital up to the extent of an investor’s tax basis. This expectation reflects the company’s view, not a guarantee of individual shareholder treatment. Strategy advises investors to seek tax guidance tailored to their unique situations.
STRC remains unsecured. Strategy clarifies that its preferred securities are not backed by its Bitcoin holdings and only hold a preferred claim on the company’s residual assets. Moreover, the company warns that STRC is not a bank deposit, nor is it FDIC-insured, and lacks the protections associated with Treasury securities or money-market funds.
Future outlook for STRC and Strategy
Chief Executive Phong Le stated that management aims for STRC to trade between $99 and $100 “over time.” No specific timeline has been established for achieving this range, and the current closing price of $89.46 indicates that the market still seeks a yield greater than the stated 12% rate.
The next confirmed event is the distribution on Aug. 15. Investors will be closely monitoring Strategy’s future monthly rate decisions, additional STRC buybacks, and weekly SEC disclosures concerning common-stock sales, Bitcoin transactions, and adjustments to the dollar reserve.
Saylor also posted “Bitcoin Drive engaged” on Aug. 2 alongside the company’s treasury chart. This statement may heighten expectations for a new purchase disclosure, although it does not confirm any recent Bitcoin acquisitions or the reversal of the current pause. Verification would necessitate an SEC filing or company announcement.
Until then, Strategy relies on its existing 12% rate, semi-monthly payments, cash reserves, and discounted repurchases instead of proposing another dividend increase for STRC investors.
