Strategy's (MSTR) perpetual preferred stock STRC declined 3% during Friday's pre-market trading, hovering below $73, roughly 27% below its $100 par value. All eyes are on June 30, a date that triggers two crucial events.
Ex-Dividend Date: $0.48 Distribution
First, June 30 is the ex-dividend date. Investors who own STRC before this date will receive the next dividend payment, while buyers on or after June 30 will not. The date also serves as the record date, determining eligibility for the distribution. Eligible investors will receive STRC's first semi-monthly dividend of $0.48 per share on July 15.
Typically, a stock declines by roughly the amount of its dividend when trading ex-dividend. For STRC, a $0.48 adjustment on a $73 stock represents less than 0.7%, while STRC has been falling as much as 2-3% daily. Hence, the ex-dividend date theoretically should not be a major catalyst for further downside.
Monthly Dividend Rate Reset: A Bigger Catalyst
The more significant catalyst is Strategy's monthly dividend rate reset. STRC is a perpetual preferred stock with no maturity date, and its dividend rate can be reset periodically. Despite STRC trading well below par, Strategy has maintained the dividend rate at 11.50% for four consecutive months.
With a one-month volume weighted average price (VWAP) of $91.46 and shares now at $73, the stock's effective yield—annual dividend relative to market price—has climbed to approximately 15%. This indicates investors demand a much higher return than the current rate offers, leading to expectations of a modest increase to at least 12% or 12.50%.
For STRC holders, a sustained recovery toward par value may depend more on Bitcoin's performance than on a small dividend adjustment. MSTR common stock is trading around $85, more than 84% below its November 2024 all-time high, further pressuring Strategy's Bitcoin-leveraged capital structure.