Strategy Inc. has elected to maintain the annual dividend rate on its Variable Rate Series A Perpetual Preferred Stock, known as STRC, at 12 percent for August 2026. The decision comes after the shares closed July at $89.46, remaining well below their $100 par value, and follows a period in which market participants had anticipated a possible further increase.

Dividend Decision Defies Recent Pattern

Led by Executive Chairman Michael Saylor, Strategy confirmed the 12 percent rate will apply to the relevant August record dates. In prior months the company had raised the payout when STRC spent extended periods trading at a sizable discount. As recently as the start of July, the firm lifted the rate by 50 basis points after the preferred shares fell as low as approximately $71 during June.

That earlier increase, combined with selective Bitcoin sales to support dividend funding and a measure of price stabilization in the cryptocurrency, helped STRC recover to the current level near $89. Despite the rebound, the stock remains roughly 10 to 11 percent below par. Management is under no contractual obligation to adjust the rate monthly and opted to leave it unchanged this time.

Background on STRC and the Ratchet Structure

STRC launched in July 2025 at a 9 percent rate and has climbed through successive monthly adjustments to reach its present 12 percent level, the highest since inception. The instrument features a ratchet mechanism under which the dividend rate rises when the shares trade below designated thresholds, such as $95. Once raised, the rate cannot be reduced under the same conditions that trigger increases, creating a one-directional path for the coupon.

Dividends are now paid on a semi-monthly schedule following stockholder approval earlier in 2026. Record dates fall on the 15th and the last day of each month, with corresponding payout dates on the subsequent record dates. The semi-monthly cadence replaced the original monthly schedule and is intended to support liquidity and reduce price cyclicality around ex-dividend periods.

Strategy has used proceeds from STRC issuance, along with other preferred securities, to expand its Bitcoin holdings without relying solely on common-stock sales. The preferred shares rank above common equity in the capital structure for dividend and liquidation purposes.

Market Context and Competitive Pressures

The persistent discount has limited the company’s ability to issue new STRC shares through its at-the-market program, constraining one channel for raising capital to acquire additional Bitcoin. Competition from other high-yield preferred instruments, including those offering higher stated rates or more frequent payments, has also drawn investor attention away at times.

STRC’s price movements have historically tracked Bitcoin’s volatility. Periods of weakness in the cryptocurrency have made it more difficult for the preferred stock to remain anchored near par even at the elevated dividend rate. In response, Strategy has built liquidity measures that include a substantial dollar reserve and a Bitcoin monetization program authorizing selective sales of the digital asset when management considers it advantageous. Combined, these buffers have been described as covering roughly two years of preferred dividend and interest obligations under stated assumptions.

Longer-Term Objectives and Capital Framework

In late June the company introduced a Digital Credit Capital Framework that formalized several elements of its approach. The framework includes a policy to maintain a minimum cash reserve covering at least 12 months of preferred obligations, authorization for repurchase programs covering preferred securities and common stock, and the Bitcoin monetization capacity noted above. The 12 percent rate itself took effect for record dates on or after July 1 under that broader package of measures.

Company executives have reiterated that the long-term goal remains for STRC to trade near its par value on a consistent basis. The decision to hold the dividend steady in August illustrates the discretionary flexibility management retains in balancing near-term shareholder returns against broader capital and treasury objectives. Holders will continue to receive the 12 percent annualized rate on the established semi-monthly schedule pending any future board action.