Strategy Proposes Semi-Monthly Dividends on STRC Preferred Stock

Strategy has filed a proposal to change the dividend payment frequency on its popular STRC preferred stock from monthly to semi-monthly.

The move aims to reduce the pronounced monthly patterns that currently affect the instrument around each record and ex-dividend date. Strategy said that if approved by shareholders on June 8, STRC would become the only preferred security and equity in the world paying dividends twice per month while keeping the annualized yield and total annual obligations unchanged at the current 11.50% level.

The issue with the current monthly structure has become increasingly visible as STRC has grown rapidly. Liquidity and at-the-market issuance velocity spike sharply in the days leading up to the mid-month record date, only to drop off significantly afterward. This pattern leaves nearly half of each month with reduced trading activity and capital-raising momentum. On the ex-dividend date itself, STRC has shown an average price drawdown of about 45 cents before gradually recovering toward its $100 par value over the following weeks.

Strategy Executive Chairman Michael Saylor and CEO Phong Le explained the thinking behind the change. Saylor noted that the team has continuously worked to improve the instrument and concluded that doubling the frequency would make it twice as good. Phong Le added a musical analogy: “We are moving stretch an octave higher. Same yield at this point in time, 11.5% annualized. And we’ll increase the frequency 2x. We think that increases the clarity, the brightness, the brilliance of the instrument and effectively makes it two times better.” He also highlighted the benefit for MSTR common shareholders, noting that higher STRC demand would lead to higher Bitcoin yield, which should drive higher mNAV. This in turn would lower the overall cost of capital for STRC since dividends are paid using MSTR common shares.

The semi-monthly schedule is expected to stabilize the price and dampen patterns around record dates, flatten liquidity and ATM velocity throughout the month, cut the typical ex-dividend drawdown roughly in half, provide more frequent entry and exit opportunities for investors, enable faster dividend reinvestment with reduced lag, and improve eligibility for low-volatility indices while enhancing STRC’s utility as collateral with better haircuts and advance rates for borrowing. It would also align payments with the bi-monthly U.S. payroll cycle that many investors already follow.

The proposal requires approval from both STRC holders and MSTR common shareholders at the June 8 meeting. If passed, the first semi-monthly record date would be June 30, with the initial payment under the new cadence on July 15 — allowing accelerated dividends to begin roughly one month after the vote.

Strategy views the change as another step in its digital credit innovation, positioning STRC as an even more attractive high-yield, low-volatility, high-liquidity instrument backed 4.3x by Bitcoin. Stronger demand for STRC is expected to support faster capital raises, additional Bitcoin accumulation, and ultimately higher Bitcoin-per-share for MSTR common holders.

Not all observers are convinced. Bitcoin critic Peter Schiff questioned the sustainability of the structure, tweeting that Strategy is “forced to issue preferred shares with an 11.5% yield” and warning that obligations “can only be satisfied by selling more preferreds, discounted common, or Bitcoin,” while raising concerns about potential future lawsuits if dividends are ever cut.

Others see the shift as significant. Investor and Bitwise advisor Jeff Park called it “a pretty revolutionary moment for corporate finance,” highlighting that no other issuer-originated corporate instrument currently offers semi-monthly dividends and noting the premium many retail investors place on more frequent payments.

The amendment continues Strategy’s pattern of refining its Bitcoin treasury strategy through innovative financial products. Voting details and the full investor deck are available via Strategy’s filings, with the definitive proxy expected later this month.