STRC preferred shares dividend remains at 12% as price stays below par
Investors await dividend increase while share prices continue to trade below face value.
1No change in dividend rate
Strategy company has fixed the dividend rate for STRC preferred shares at 12% for August. Despite share prices remaining below the $100 par value throughout July, no dividend increase was made. The management announced this decision via Michael Saylor's tweet on Saturday. Saylor continues to describe STRC shares as 'a way to stretch your income' in his communications.
2Share performance and price movements
STRC shares closed at $89.46 on Friday, ending July with a 5.42% increase. At the beginning of the month, the dividend rate had been increased by 50 basis points to 12%. Trading volume was about two-thirds of the daily average. Company CEO Phong Le reiterated that having shares trade in the $99-100 range over time remains the corporate objective.
3Signal of potential Bitcoin treasury changes
Michael Saylor hinted on Sunday about possible changes to the company's Bitcoin holdings. His tweet thread starting with 'Bitcoin Drive engaged' included charts showing the company's BTC purchases. Strategy had previously reported an $8.32 billion unrealized loss in Q2 due to declining Bitcoin prices affecting its treasury value.
4Cash reserve and share buybacks
The company announced it has built a $3.75 billion cash reserve to support preferred share payments following the launch of its Bitcoin monetization program. This amount is sufficient to cover more than two years of dividend and interest payments. Strategy also repurchased $25 million of STRC preferred shares below par value and stated its intention to continue buybacks.
5Semi-monthly dividend payment schedule
August will mark the second month of semi-monthly dividend payments, a change approved by shareholders in June. This new payment schedule provides investors with more frequent cash flow. Historically, the company has increased dividends when share prices remained below par value for extended periods.
6Market expectations and analyst views
Market participants find it surprising that no dividend increase was made despite shares trading below par value for an extended period. Analysts suggest the company is being cautious due to Bitcoin volatility and cash flow pressures. The continuation of the share repurchase program is being viewed positively by investors.
7Impact of declining Bitcoin prices
Strategy reported a Q2 net loss of $8.22 billion, with $8.32 billion coming from unrealized losses on Bitcoin holdings as prices declined throughout the quarter. The decreasing value of the Bitcoin treasury raises concerns about the company's dividend-paying capacity and long-term financial stability.
8Long-term strategy and investor confidence
STRC share performance raises questions about the sustainability of the company's Bitcoin-centric business model. Management is attempting to maintain investor confidence through cash reserves and share buybacks. However, market participants question the sustainability of dividend payments if Bitcoin price volatility persists.
Original article: Cointelegraph.com News — STRC hisselerinde temettü oranı %12'de sabit kaldı