Strategy raises STRC dividend to 12%, locks in $3B reserve plan to cover preferred stock obligations

Strategy, the publicly traded company formerly known as MicroStrategy, has bumped the annualized dividend rate on its Series STRC perpetual preferred stock to 12%, effective July 2026. The move comes alongside a broader financial blueprint covering cash reserves, stock repurchases, limited Bitcoin sales, and what the company calls “digital credit” initiatives.

This is at least the sixth time Strategy has raised the STRC dividend since launching the instrument in July 2025.

The math behind the hike

STRC was designed as a perpetual preferred stock with a $100 par value, paying dividends instead of interest, with its value closely tethered to Bitcoin’s price swings.

STRC shares have been trading significantly below that $100 par value. Recent prices have ranged between $74 and $91, which means anyone buying at those levels is locking in effective yields north of 16%, well above the stated 12% rate.

The previous dividend rate sat at 11.50%, and the trajectory has been consistently upward since STRC’s debut.

How Strategy plans to keep the lights on

Strategy’s total annual preferred dividend payments across all its series now run approximately $1.2B. Strategy has expanded its cash reserves to cover roughly 10 months of dividend obligations.

The company has outlined several mechanisms to maintain liquidity: capital raises through equity issuance, stock repurchases, and limited Bitcoin sales as part of its monetization approach.

STRC features semi-monthly dividend payments rather than the quarterly schedule most preferred stocks follow, designed to enhance liquidity and investor confidence.

What this means for investors

For yield-seekers, STRC at current trading levels offers effective yields above 16% from a publicly traded, NASDAQ-listed instrument. The risk is straightforward: if Bitcoin enters a sustained bear market, Strategy’s ability to maintain these dividend payments could come under severe pressure.

The 10-month reserve cushion provides some insulation, but reserves only buy time against the challenge of generating enough cash to cover $1.2B in annual preferred dividends if Bitcoin prices decline materially and capital markets become less receptive to new issuances.

The key variable to watch is the gap between STRC’s trading price and its $100 par value. If that gap narrows, it means the market is gaining confidence in Strategy’s financial engineering. If it widens despite the 12% rate, the next dividend hike probably isn’t far behind.

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