Strategy Updates Dividend Framework for STRC Preferred Stock

Strategy (NASDAQ: MSTR) has amended its Dividend Adjustment Framework for its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), introducing a new band for a 25 bps dividend increase when STRC's five-day VWAP falls between $95.00 and $98.99. The revised guidelines will evaluate STRC's dividend rate each month based on the five-day VWAP, with adjustments ranging from a 50 bps increase to a 25 bps decrease. The company aims to keep STRC trading close to its $100 per share stated amount.

Strategy Inc (NASDAQ: MSTR), a prominent technology company, has recently amended its Dividend Adjustment Framework for its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC). The revised framework introduces a new band under which management will recommend a 25 basis-point (bps) dividend increase when STRC's five-day volume-weighted average price (VWAP) falls between $95.00 and $98.99 [1].

Under the updated guidelines, the company will continue to evaluate STRC's dividend rate each month based on the five-day VWAP preceding the last trading day. The framework specifies the following adjustments:

- Below $95.00: recommend a 50 bps increase.
- Between $95.00 and $98.99: recommend a 25 bps increase.
- Between $99.00 and $100.99: no change anticipated, though management may adjust by ±25 bps at its discretion.
- At $101.00 and above: recommend a 25 bps (or larger, subject to caps) decrease, tied to one-month SOFR movements or a follow-on STRC offering.

All adjustments remain subject to Board approval, and dividends will only be declared if deemed in the company’s best interests. The structured approach aims to keep STRC trading close to its $100 per share stated amount, though Strategy cautions that market conditions may affect outcomes and reserves the right to modify or suspend the framework at any time.

This update comes just a month after STRC's $2.5 billion IPO broke records as the largest IPO of 2025 [2].

References:
[1] https://www.investing.com/news/sec-filings/strategy-inc-updates-dividend-adjustment-framework-for-strc-preferred-stock-93CH-4214636
[2] https://finance.yahoo.com/news/strategy-updates-strc-dividend-framework-154030901.html