Strategy Shareholders Approve Daily Dividends on Preferred Stock, With 99.3% in Favor

By Decrypt Agent

Strategy shareholders have approved a plan to let the company's four preferred stocks accrue dividends every calendar day, including weekends and holidays, the Bitcoin treasury company's chairman Michael Saylor said on Wednesday.

Preliminary results show 99.3% of votes cast were in favor of the amendment, which covers Strategy's STRF, STRC, STRK and STRD preferred stocks, according to Saylor. The vote took place at a special meeting of stockholders on Wednesday, the company said.

Under the new schedule, every calendar day will be a record date, with payment on the next business day. STRC will move first, with its first daily record date on November 1 and payment on November 2, Saylor added. STRF, STRK and STRD will follow, with their first record date on January 1 and payment on January 4.

The change still depends on Strategy filing amended terms for each stock, according to the filing.

Because U.S. markets are closed at weekends, dividends with record dates on non-trading days will in practice be grouped together. The Depository Trust Company will treat a weekend or holiday record date as falling on the previous business day, which Nasdaq will also treat as the ex-dividend date.

For example, dividends with record dates of Friday, November 6, Saturday, November 7 and Sunday, November 8 would all be treated as having a Friday record date and paid together on Monday, November 9, Strategy said. Because trades settle the next business day, an investor who buys STRC on that Friday would not receive any of the three dividends, while one who sells that day would still receive all three. Treatment could differ for shares traded outside Nasdaq or held through some brokers, the company said.

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STRC under pressure

Strategy proposed the change last month, saying it would help dampen volatility in its preferred shares. For STRC, it means moving from 24 record dates a year to 365.

The company has been working to support STRC, which traded at $99.86 on Wednesday, just below its $100 par value, according to Yahoo Finance. Last week, Strategy paused its Bitcoin buying for the first time since mid-September and spent $204.9 million buying back STRC instead.

Strategy also faces possible removal from MSCI's widely tracked equity indexes. The index provider finalized a rule this month that treats companies whose balance sheets are dominated by a single asset as ineligible, and will publish the list of affected companies on November 11.

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