Bitcoin treasury company Strategy has filed a preliminary proxy statement proposing that dividends on its four U.S. preferred shares—STRF, STRC, STRK, and STRD—accrue every calendar day, including weekends and holidays, with payments made the following business day. Executive Chairman Michael Saylor announced the initiative on Thursday, stating that the economic terms remain unchanged but the frequency of accrual shifts from quarterly or monthly schedules to a 365-day model. The proposal requires shareholder approval, with a vote scheduled for October 28. If approved, STRC will implement the change first, with a record date of November 1 and payment on November 2. The remaining three securities will continue their current schedule through December 31 before switching to daily accrual on January 1.
The move aims to address price volatility and improve market structure for these instruments. President and CEO Phong Le noted that STRC currently has 24 record dates annually, while all four would move to 365. For the three quarterly payers, this represents a 90-fold increase in frequency. Le cited data showing that when STRC paid monthly, its price dropped about 49 basis points on the day before the dividend; after moving to semi-monthly payments in June, that drop narrowed to roughly 36 basis points. Strategy argues that higher adjustment frequency lowers instrument volatility, facilitating easier entry and exit for investors. The company also anticipates benefits such as steadier month-end marks for fund managers, a home for institutional idle cash, faster reinvestment cycles, potential inclusion in low-volatility indices, and improved collateral haircuts. Shareholders previously supported the shift to semi-monthly payments for STRC with 97.5% approval, and Strategy has since paid $255 million in STRC dividends.
This structural modification to dividend mechanics reflects a sophisticated attempt by Strategy to optimize the secondary market behavior of its capital instruments. By transitioning from discrete payment events to continuous accrual, the firm seeks to eliminate the predictable price dislocations that occur around traditional ex-dividend dates. The empirical evidence provided regarding the narrowing of pre-dividend price drops suggests that increased frequency effectively dampens volatility, thereby enhancing the attractiveness of these securities for institutional participants who prioritize stable valuation metrics and efficient capital deployment. This approach aligns with broader trends in financial engineering where granularity in settlement and accrual is used to reduce friction and improve liquidity profiles.
From an operational and regulatory standpoint, the implementation of daily accrual across multiple jurisdictions and clearing systems presents complex logistical challenges that must be navigated carefully. While the economics remain unchanged, the administrative burden of processing 365-day accruals versus traditional quarterly cycles requires robust infrastructure support. Furthermore, positioning these instruments as unique global securities with daily dividends could influence how they are classified within index methodologies and collateral frameworks. The success of this initiative depends not only on shareholder approval but also on the market's reception of these new mechanics, particularly whether the reduced volatility translates into tighter bid-ask spreads and deeper order books, ultimately supporting Strategy’s objective of maintaining a stable funding mechanism for its Bitcoin holdings.
