Strategy Keeps STRC Dividend at 12% Amid Price Gap

Strategy holds STRC dividend steady despite discount

Strategy Inc. has announced that the variable annual dividend rate for its Nasdaq-listed preferred security, STRC, will remain at 12% for August 2026. The decision comes even as the security closed July 31 at $89.46 — more than 10% below its $100 stated value. Executive Chairman Michael Saylor promoted STRC as an income vehicle with semi-monthly payouts, but company management has shifted to a broader, market-aware approach for setting the dividend.

Why Strategy left the dividend unchanged

Strategy’s decision to maintain a 12% annualized dividend reflects a deliberate change in policy implemented on June 29. Under the revised framework, the company evaluates multiple market and balance-sheet factors before adjusting the rate: STRC’s market price, credit spreads, competing yields, Bitcoin volatility, the size of the dollar reserve and the broader capital structure. That means the security trading below par alone is no longer an automatic trigger for higher dividends.

The company raised STRC’s rate from 11.5% to 12% for July record dates after a steep sell-off in June that saw STRC dip as low as $71.25. Management has since said it will keep the 12% rate in place until STRC demonstrates "sustained, healthy trading" near $100. This language outlines an objective rather than a firm guarantee that STRC will return to par.

Market price and effective yield

With STRC at $89.46 on July 31 and an annualized payout based on the $100 stated amount equaling $12, the effective cash yield investors receive at that market price is roughly 13.41%. Because the company announced the unchanged rate over a weekend, traders had no immediate post-announcement Nasdaq reaction to observe.

Buybacks take on a larger role to support price

Rather than continuing to raise the dividend, Strategy has leaned into preferred-share repurchases as a tool to boost demand and reduce outstanding stated value. Between July 20 and July 26, the firm repurchased 288,930 STRC shares for about $25 million, paying an average of $86.53 per share — a 13.47% discount to par.

Approximately $975 million remains available under Strategy’s $1 billion repurchase authorization. The company says it intends to buy more STRC at deeper discounts and plans to taper repurchases as the security approaches $100. The authorization is discretionary, carries no fixed expiry and does not obligate Strategy to spend the remaining amount.

Financial mechanics of repurchases

Buying STRC below par reduces the number of preferred shares that require future U.S. dollar distributions and allows Strategy to retire $100 of stated value for less than $100 in cash. However, share repurchases consume liquidity that might otherwise be used for paying dividends, servicing debt, or buying Bitcoin — a trade-off the company has weighed carefully.

Strategy funded its initial $25 million buyback while increasing its U.S. dollar reserve and keeping Bitcoin purchases on pause. Much of that liquidity came from sales of MSTR common stock rather than issuing additional STRC.

The dollar reserve: primary buffer for dividend and interest obligations

As of July 26, Strategy reported a $3.75 billion U.S. dollar reserve. The company estimates that this cash cushion would cover roughly 2.1 years of expected preferred-stock dividends and interest on outstanding debt at current payout levels and obligations. The board restricts use of this reserve to these specific purposes unless otherwise approved.

The reserve has grown in importance as preferred-stock commitments surged. Strategy recorded $400.7 million in preferred dividends during Q2 2026, up sharply from $49.1 million in the year-earlier quarter. Cumulatively, the company has paid or declared more than $1 billion in preferred distributions.

Accounting losses vs. cash needs

Strategy posted an $8.22 billion net loss for Q2, driven mainly by an $8.32 billion unrealized markdown on its Bitcoin holdings. While those unrealized losses do not equate to cash outflows, preferred dividends must be settled in U.S. dollars. To replenish the dollar reserve and meet obligations, the company authorized selective Bitcoin sales and reported selling roughly $218.4 million of BTC during 2026 through July 26.

As of July 26 Strategy held about 843,775 BTC at an average acquisition cost near $75,476 per coin. Using Bitcoin’s market price on July 27, the firm valued that BTC position at about $54.77 billion versus an original cost basis of approximately $63.69 billion.

Distribution cadence, tax treatment and security risks

Following shareholder approval in June, STRC shifted from monthly to semi-monthly distributions. Record dates now fall on the 15th and the last day of each month, with payments typically issued roughly 15 days later. Strategy has already declared a $0.50-per-share payment for the Aug. 15 record date to shareholders of record as of July 31.

For U.S. federal tax purposes Strategy currently expects these payments to be treated as returns of capital to the extent of an investor’s tax basis. That is an expectation, not a guarantee; investors should consult tax advisors for personal guidance.

Investors should also be aware that STRC is unsecured — it is not collateralized by the company’s Bitcoin holdings and carries only a preferred claim on residual assets. STRC is not a bank deposit, not FDIC-insured, and does not provide the same protections as Treasury securities or money-market funds.

What to watch next: events and signals for investors

The next concrete date on the calendar is the Aug. 15 distribution. After that, market participants will monitor Strategy’s next rate decision, additional STRC repurchase activity, and weekly SEC disclosures showing common-stock sales, BTC transactions and changes to the U.S. dollar reserve.

CEO Phong Le has publicly stated the company’s objective is for STRC to trade in the $99–$100 range over time, but Strategy has not provided a timetable for achieving that target. At the current $89.46 close, the market is signaling that investors demand a yield above the stated 12% coupon.

Management signals and market expectations

Michael Saylor’s social posts continue to draw attention — on Aug. 2 he tweeted “Bitcoin Drive engaged” alongside Strategy’s treasury chart, which could stoke investor hopes of a new Bitcoin purchase. However, social posts do not confirm transactions; any change in bitcoin holdings or reserve funding would require an SEC filing or formal company announcement to be verified.

Implications for crypto investors

For yield-seeking crypto investors, STRC remains an attractive high-coupon instrument at a notably higher effective yield when purchased below par. But buyers must weigh elevated income against risks: the dividend decision now depends on multiple market and balance-sheet variables, the security is unsecured, tax treatment may vary by holder, and further dividend hikes would materially raise Strategy’s cash obligations across the roughly $10.46 billion of outstanding STRC stated value.

Strategy appears to be balancing dividend policy, repurchases and its dollar reserve to manage liquidity while attempting to restore demand for STRC. Investors will be watching subsequent repurchase disclosures, reserve changes, and any verified Bitcoin transactions to assess whether the company’s approach is sufficient to narrow STRC’s discount and stabilize yield expectations.

In short, Strategy has held the STRC coupon at 12% for August while relying more on buybacks and cash reserves to support the security. That mix of measures — paired with market-driven dividend decisions and a still-large Bitcoin treasury — should keep STRC on the radar of income-focused crypto investors and institutional analysts alike.