Strategy Inc. conditionally declared daily November dividends on its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), a schedule totaling $1 per share if stockholders approve the amendments by 5 p.m. New York City time on Oct. 31 and the amended STRC certificate is filed and effective by 12:01 a.m. ET on Nov. 1.
An Oct. 16 Form 8-K covering the board’s Oct. 15 declaration sets a record date for every day from Nov. 1 through Nov. 30. The daily amounts of $0.03 or $0.04 add up to $1 per share, at a 12% annual rate if the conditions are met. The first listed payment date is Nov. 2 and the last is Dec. 1; the filing assigns each record date to a subsequent business-day payment. Weekend and Federal Reserve Bank of New York closure days may put multiple record dates on one payment date.
At its special meeting, scheduled for Oct. 28 at 10 a.m. ET, stockholders will consider daily-dividend amendments for four preferred series: STRF, STRC, STRK and STRD. The amendments must be approved by 5 p.m. New York City time on Oct. 31. STRC’s amended certificate must also be filed and effective by 12:01 a.m. ET on Nov. 1.
If the vote and certificate requirements are met, the previously declared Nov. 15 dividend will not be payable and the daily schedule will apply. If either requirement is missed, the daily dividends will not be payable and the Nov. 15 dividend remains due. Strategy expects, subject to board approval, to declare dividends under the existing semi-monthly schedule in that case.
STRC currently pays dividends semi-monthly. Strategy’s proxy says the proposed change aims to shorten the wait for holders who want to reinvest distributions and reduce dividend-related price fluctuations. It also cites potential benefits for liquidity, market efficiency and common stockholders’ access to preferred equity capital. The amendment would not change STRC’s dividend rate or the company’s overall regular dividend obligations.
Common stockholders as of Sept. 25 can vote on the proposals. STRC holders and holders of Strategy’s other preferred shares are not eligible to vote.
