Bitcoin treasury company Strategy is seeking approval to distribute daily dividends to investors holding four of its preferred stocks.
As the leading corporate holder of bitcoin, the firm announced Friday that it has asked shareholders to vote on a proposal that would disburse dividends every calendar day—spanning weekends and holidays—for its STRF, STRC, STRK, and STRD shares.
In an official statement, Strategy noted, “If approved and adopted, we believe this would reduce reinvestment lag, enhance liquidity and market efficiency, and increase price stability.” Stockholders are scheduled to gather for a vote on this proposal on October 28.
Amid a bear market for the leading cryptocurrency, Strategy decelerated its aggressive bitcoin purchases throughout the year. Instead, the Nasdaq-listed enterprise concentrated on safeguarding its balance sheet and liquidated portions of its bitcoin holdings.
Friday’s disclosure asserted that the adjustment would benefit both investors and common stockholders alike.
“We believe these enhancements can also benefit our common stockholders by increasing the attractiveness and utility of our Digital Credit instruments, supporting our ability to access preferred equity capital efficiently and expanding the capital markets toolkit we use to execute our Bitcoin Treasury strategy,” the company stated.
Formerly known as MicroStrategy, Strategy transitioned from an enterprise software firm into a company focused on acquiring and holding bitcoin starting in 2020.
The enterprise initially purchased the digital currency to shield shareholders from inflation. Following that move, it aggressively accumulated the asset and restructured itself into a dedicated bitcoin treasury.
Currently, investors can purchase the company’s shares to gain amplified exposure to the cryptocurrency or earn a yield through its digital credit offerings.
Previously, the corporation acquired bitcoin every Monday, but it scaled back those purchases after introducing a program to periodically sell BTC. This initiative aimed to generate up to $1.25 billion in proceeds for a USD reserve, support preferred stock dividends and interest expenses, or fund share repurchases.
In a regulatory filing on Monday, Strategy revealed it acquired 950 bitcoins for $75.7 million during the previous week, marking its first purchase since August.
Reflecting the downturn in bitcoin’s price, the firm’s Nasdaq-listed stock (MSTR) has declined by nearly 50% over the past year.
Even so, MSTR has surged by nearly 1,000% since the business initiated its bitcoin acquisition strategy in 2020.
Frequently Asked Questions
What is Strategy proposing for its preferred stocks?
Strategy is asking shareholders to approve daily dividend payments for four of its preferred stocks (STRF, STRC, STRK, and STRD), which would accrue every calendar day—including weekends and holidays—and be paid the next business day.
When will shareholders vote on the daily dividend proposal?
Stockholders are scheduled to vote on the proposal at a meeting on October 28.
Why did Strategy slow down its bitcoin purchases?
The company decelerated its aggressive bitcoin acquisitions as the top cryptocurrency entered a bear market, shifting its focus toward protecting its balance sheet and selling portions of its holdings.
When did the company start buying bitcoin?
Strategy—formerly known as MicroStrategy—began purchasing bitcoin in 2020 as a hedge against inflation for its shareholders.
