Strategy confirmed its Stretch (STRC) preferred stock will keep paying a 12% annualized dividend in August 2026, even after the security closed July at roughly 12% below its $100 par value.
Key Takeaways
Strategy held STRC’s dividend rate at 12% for August 2026, its highest rate since the July 2025 launch.STRC closed at $89.46 on July 31, about 10-11% below its $100 par value.Experts have warned the ratchet mechanism creates “a structure with a finite number of cycles.”STRC is one of several preferred stock instruments, alongside STRK, STRF and STRD, that Strategy has issued to fund its bitcoin acquisitions without diluting common shareholders as heavily as issuing more MSTR stock would. Strategy also shifted STRC to a semi-monthly dividend payment schedule, with the first twice-a-month payout landing on July 15, 2026, replacing the single monthly payment investors had received since the July 2025 launch.
Still Stuck Below ParCompetition has added pressure with rival Strive’s SATA preferred security offering a roughly 13% yield with daily dividend payments and no underlying debt, drawing investor demand away from STRC even before its June price collapse. The spread between the two securities has widened to one of the largest gaps on record, with SATA trading near its own $100 par value while STRC lags well behind it.
The persistent discount has forced Strategy to pause new STRC issuance through its ATM program, limiting the company’s ability to keep adding to its bitcoin holdings using that specific funding channel.
STRC’s struggles have tracked bitcoin’s own volatility this year. The preferred stock has historically moved in tandem with bitcoin’s price, and weakness in the underlying asset has made it harder for Strategy (Nasdaq: MSTR) to keep STRC anchored near par even with a record-high dividend rate attached to it.
A capital structure that survives volatility only by adding permanent obligations is a structure with a finite number of cycles in it.
Rosen Law Firm opened an investigation on June 25 into whether Strategy can sustain its preferred dividend payments if bitcoin remains below the company’s roughly $75,651 average cost basis. Adding to the concentration risk, retail investors hold an estimated 83%, or about $8.8 billion, of outstanding STRC shares, a base analysts have flagged as more prone to reactive selling during downturns than institutional holders.
Strategy has built financial buffers to offset those concerns. The company holds a liquidity buffer covering roughly 26 months of dividend and interest obligations, after adopting a Digital Credit Capital Framework in late June that authorized $2 billion in combined preferred and common stock buybacks alongside a bitcoin monetization program.
