Strategy Daily Dividends Approved as 99.3% of Holders Vote Yes

Strategy daily dividends STRC preferred shares $100

Strategy just turned its preferred shares into a daily paycheck. Holders voted 99.3% in favor, so dividends will now build up every calendar day, weekends and holidays included, instead of on a handful of dates each year.

Key points:

Almost everyone said yes: 99.3% of votes backed the switch to daily dividends at Wednesday's special meeting.
STRC goes first, with its first daily record date on November 1 and cash paid on November 2, while the other three shares follow on January 1.
Weekend days get bundled and paid on the next business day, so a Friday, Saturday and Sunday record date all land together on Monday.

Strategy put this plan on the table last month to calm the swings in its preferred shares. For STRC, the change is huge in plain terms, moving from 24 record dates a year to 365. The share traded just under its $100 par value on Wednesday, and that line is the whole story here, because near $100 Strategy can start issuing new shares instead of buying them back.

The mechanics are simple, with one quirk worth knowing. Every calendar day now counts as a record date, and the cash is paid on the next business day. Since markets shut on weekends, a weekend record date gets treated as the Friday before it, so the Friday, Saturday and Sunday payouts all arrive together on Monday. That also means someone who buys STRC on that Friday misses all three payouts, while someone who sells that day still pockets them. The switch still needs Strategy to file amended terms for each share, so the paperwork has to land before the first payout.

What do daily payouts change for holders?

For holders, the pitch is steadier income and a calmer share price. Strategy spent $204.9 million buying back STRC last week, and it paused its Bitcoin buying for the first time since mid-September to do it, which tells you how much work the company is putting into holding this share up. Daily payouts are the next step in that same push. A share that pays out every day is a lot harder to push around than one that pays a few times a year.

My own read is this: The vote was the easy part, since nearly everyone agreed. The real test starts on November 1, when STRC has to hold its ground day after day with real money going out the door. If it slips back under $100, holders will ask what daily dividends actually fixed.

There is one more date circled on the calendar. MSCI, the index firm, will publish its list on November 11 under a new rule that can shut out companies whose balance sheets are dominated by a single asset, and Strategy is right in the frame for that call. A bad outcome there would hit the stock far harder than any dividend schedule can help, so watch that list as closely as the first payout.

— BitByLine News Desk

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Sources: Decrypt, Cointelegraph