Michael Saylor's Strategy to Implement Bi-Monthly Dividend Payments for STRC

Strategy, a leading bitcoin treasury company, has announced plans to modify the dividend payment schedule for its perpetual preferred equity, Stretch (STRC), from a monthly to a semi-monthly basis. This change, as outlined in Strategy's investor presentation, would maintain the annualized dividend rate of 11.5% and keep total annual obligations unchanged at $1.2 billion. Shareholders can expect to receive payouts approximately every two weeks, rather than once a month, with the first semi-monthly payment anticipated on July 15, following the June 8 shareholder vote. According to Strategy, the current monthly dividend payment schedule results in an average price decline of $0.45 for STRC after the ex-dividend date, with the stock taking around two weeks to recover to its par value of $100. By adopting a semi-monthly payment schedule, the company seeks to reduce volatility and minimize the time lag between dividend payments. This, in turn, would enable Strategy to maintain a more consistent capital raising program, as the company is unable to issue shares through its at-the-market (ATM) program when STRC trades below its $100 par value. The semi-monthly payments are expected to reduce the price drawdown and time lag associated with the ex-dividend date. Furthermore, more frequent payouts would reduce reinvestment lag and spread out the buying pressure more evenly across the month, allowing Strategy to purchase bitcoin at a steadier pace. This approach aligns with the typical twice-monthly U.S. payroll cycle and creates more entry and exit opportunities for shareholders, ultimately aimed at lowering volatility. If approved, STRC would become the only preferred share in the market to offer semi-monthly dividend payments, setting it apart from the 921 preferred shares that pay quarterly and the 32 that pay monthly. Recent market activity has seen STRC fall below $99 following the April 15 ex-dividend date, a drop of over $1, highlighting the volatility that the company aims to mitigate through this change.