Strategy Raises Dividend on STRC Offering to Attract Yield-Seeking Investors

Strategy (MSTR), the bitcoin (BTC) treasury company that has sold tranches of preferred stock to raise money to buy more of the largest cryptocurrency, increased the dividend on its STRC offering to attract more investors and push the price toward its $100 ￰0￱ Tysons Corner, Virginia-based company increased the payout by 1 percentage point to an annualized 10%, Executive Chairman Michael Saylor said in a Tuesday post on ￰1￱ the increase, the monthly dividend for September will be $0.8333 per ￰2￱ addition, the company said it bought another 4,048 BTC, bringing its total holdings to 636,505 ￰3￱ its July 30 debut, STRC has risen about 8% and is trading near $97, just below its $100 target ￰4￱ STRC reaches that level, it achieves Strategy’s par value target, reinforcing the price stability central to its design as a high-yield, low-volatility ￰5￱ effective yield — the dividend divided by STRC's market price — is currently 10.3%.

The payout is underpinned by a 5-to-1 bitcoin overcollateralization: For every $1 of dividend promised on an STRC share, there is roughly $5 worth of bitcoin held in reserve to back ￰6￱ $100 price target is crucial to Strategy's at-the-money (ATM) issuance ￰7￱ STRC trades below that level, the company cannot issue more shares through the ATM to bulk up its bitcoin ￰8￱ company also declared quarterly cash dividends of $3.0556 per share for STRD, $2.50 per share for STRF, $2.00 per share for ￰9￱ dividends are payable on Sept. 30 to shareholders of record as of Sept. 15.