Key Takeaways:
Bitcoin treasury pioneer MicroStrategy (MSTR) has proposed to pay dividends twice per month on its STRC preferred stock, a move that would double the payment frequency without changing the 11.5% annual yield.
"The proposed changes are intended to stabilize price, dampen cyclicality, drive liquidity, and grow demand," Executive Chairman Michael Saylor said in a statement regarding the proxy filing.
The high-yield STRC "Stretch" series has grown to $6.4 billion in outstanding notional value, according to a recent investor presentation. The company noted that volatility on the preferred stock has already fallen to just 2.1% in the last two months from 13% during its initial launch period. Doubling the payment frequency is expected to compress volatility further.
A shareholder vote on the amendment is scheduled to close on June 8, with the company targeting July 15 for the first semi-monthly payment if the proposal is approved. The change aims to make the crypto-linked yield instrument more attractive to traditional income investors by providing a more frequent and stable payment stream.
By breaking the monthly dividend into two smaller, semi-monthly payments, MicroStrategy aims to create a more consistent return profile for STRC holders. This could reduce the incentive for traders to sell immediately after a dividend payment and attract new investors who prioritize regular cash flow. The adjustment does not alter the company's total annual dividend obligation.
The move comes as shares of MicroStrategy itself have seen significant gains, rising 11.8% on Friday. The rally occurred in tandem with a 3% rise in Bitcoin (BTC), which climbed to $77,400, highlighting the strong correlation between the company's equity and the underlying digital asset. The STRC series is a key part of Saylor's strategy to leverage the company's balance sheet for Bitcoin acquisition and related yield generation.
This article is for informational purposes only and does not constitute investment advice.
