STRC: Saylor's 12% Dividend — Paid From What, Exactly?

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STRC Review: Saylor's 12% Dividend — Paid From What, Exactly? — BogusAPY title card

Score: Real checks, refinanced. STRC — Strategy's "Stretch" preferred stock — pays a genuine 12% a year, in cash, twice a month — daily starting in November — and it has never missed: about $13.90 a share has gone out the door since it listed in July 2025. It is also not paid from earnings, because there are barely any. The dividend comes out of a $2.55 billion cash reserve that Strategy refills by issuing new shares — and, since this summer, by occasionally selling Bitcoin. That's not a scam and it's not a yield from a business. It's a financing loop with a very large pile of Bitcoin standing behind it. Whether that's a good trade depends entirely on whether the loop can keep refinancing itself.

What you're actually buying

Strategy logo Official website

STRC is not Strategy's common stock (that's MSTR), and it's not Bitcoin. It's the Variable Rate Series A Perpetual Stretch Preferred Stock of Strategy Inc. — Michael Saylor's Bitcoin treasury company, the one holding 848,517 BTC (about $67.7B at ~$79,800/BTC, per its Oct 26, 2026 SEC filing). STRC is a credit instrument bolted onto that treasury. The terms, from Strategy's own STRC investor briefing:

  • $100 stated value per share, perpetual — no maturity date, ever.
  • Cumulative dividends. If a payment is ever skipped, it doesn't vanish — it piles up, and unpaid amounts themselves compound at the dividend rate.
  • Variable rate, reset by Strategy (see below). Currently 12.00%.
  • Seniority: ahead of the common stock and the STRK, STRD, and STRE preferreds; behind all of Strategy's debt and the STRF preferred.
  • No conversion into MSTR, no vote to speak of, and callable by Strategy at $101 plus unpaid dividends — your upside is capped about 1.5% above par.
  • Not secured by any specific Bitcoin. You have a claim on the company, not on the coins.

STRC price chart — weekly closes since listing (Jul 2025)

STRC price, weekly closes since listing (Yahoo Finance data, checked Oct 27, 2026). This chart is the risk section in one picture: a security engineered to sit at $100 spent most of June 2026 in the $70s–$80s. Low close $74.57 (Jun 26, 2026); intraday low $71.25.

The dividend: 12%, soon daily, and ratcheted up on purpose

STRC listed on July 29, 2025 at a 9.00% rate, paid monthly. Then the price kept sagging below $100, so Strategy did what the design says it should do: it raised the rate, again and again — the monthly check climbed from $0.80 to $0.958 a share (11.5%) — and in mid-2026 payments went semi-monthly ($0.50 twice a month). On July 1, 2026 the rate went to 12.00%, where October kept it. Total paid out per share since listing: ~$13.92, with one last semi-monthly $0.50 declared for the Oct 31 record date — a Nov 15 payment the daily switch (below) is set to replace.

Two mechanics matter more than the headline rate:

  • The rate is a thermostat, not a promise. Strategy resets it monthly to keep STRC trading near $100. If the price sags, the rate can rise (it did — 9% to 12%). If STRC ever trades rich, the rate can be cut — though the cuts are speed-limited (no more than 25bp plus any SOFR drop per period, floored at 1-month SOFR, and no cuts at all while any dividends are unpaid).
  • The calendar changed. Shareholders approved the daily-dividend amendments on Oct 28, 2026 — preliminary results put 99.3% of votes cast in favor — for STRC and for STRF, STRK and STRD. STRC goes daily first: a record date every calendar day starting Nov 1, paid the next business day (first payment Nov 2), at the same 12.00% rate — $0.03 or $0.04 a day, $1.00 total for November — replacing the $0.50 payment that was due Nov 15. The other three series follow Jan 1, 2027. Total payout does not change — same money, smaller pieces, every day. Update, Oct 30, 2026: the last condition is closed — Strategy filed the amended terms for all four series with the Delaware Secretary of State on Oct 29, 2026 (per its 8-K filed that day); STRC's amended terms take effect at 12:01 a.m. ET on Nov 1, 2026 and the other three series' on Jan 1, 2027 — so the November daily dividends will be paid as declared, and the Nov 15 payment is cancelled. Checked Oct 30, 2026.

At today's $99.49 close, the running yield is 12.06%. In this series' standard test — what does $99 a month cost? — the answer is 99 shares, about $9,850. For comparison from our monthly-dividend stock test: the cheapest covered payer (EPR) needed $17,910, and the cheapest overall (AGNC, a 16.3% yield trap) needed $7,293. STRC sits between them on price of income — with a completely different risk engine than either.

Where the dividend actually comes from

This is the section the whole site exists for, so let's be exact. Strategy's legacy software business does not throw off anything like the cash needed. Strategy's total bill for preferred dividends plus debt interest runs about $1.76 billion a year; STRC's slice alone is roughly $310M a year (~25.8M shares × $12). Where does it come from?

  • A purpose-built piggy bank. In December 2025 Strategy created a USD Reserve — cash that board policy restricts to only paying preferred dividends and debt interest, with a floor of 12 months of coverage. As of late June 2026 it held $2.55B, about 17.4 months of obligations.
  • The reserve is filled by issuing stock. The primary refill pipe is selling new MSTR shares into the market (at-the-market programs). New investors' money pays existing preferred holders' dividends. Strategy is completely open about this — it's the design.
  • And now, occasionally, by selling Bitcoin. In late May 2026 Strategy sold 32 BTC to fund dividend payments; between Jun 29 and Jul 5 it sold 3,588 BTC (~$216M) to pay dividends and refill the reserve. A board-authorized "Bitcoin Monetization Program" allows up to $1.25B of BTC sales for exactly this — which, added to the reserve, Strategy counts as ~25.9 months of coverage.

One tell that this is financing, not earnings: Strategy has told holders to expect the 2026 payouts to be treated as non-taxable return of capital (up to each holder's cost basis) — the tax code's way of saying the company has no earnings-and-profits to distribute. Your 12% is, in the IRS's framing, partly your own money coming back — funded by the next raise.

The stress test already happened — June 2026

You don't have to imagine the failure mode; it's in the chart. In June 2026, Bitcoin slid below $60,000. STRC — the thing designed to be $100 — printed $71.25 intraday and closed as low as $74.57. It has closed below $99 on 187 of its 314 trading days. Issuance at a discount stops being attractive, the machine that refills the reserve sputters, and the "stable income" asset is suddenly a 25%-down position.

What fixed it is also instructive: Strategy hiked the rate to 12%, authorized $1B buybacks of its preferreds (STRC first), bulked the reserve up toward $3B, and sold some BTC — and as Bitcoin recovered, STRC crawled back to ~par, closing at $99.49 on Oct 27. The system worked. It also needed every one of those levers, in a drawdown that only took Bitcoin to the high-$50Ks.

Risks worth naming

  • It's a refinancing bet. The dividend is covered today by a reserve with ~17–26 months of coverage and a ~$68B Bitcoin treasury. It stays covered only if Strategy can keep raising capital or selling BTC at workable prices. A long Bitcoin winter attacks all three legs at once.
  • You're capped and junior. Callable at $101 means your best case is par plus the dividend. Meanwhile every dollar of Strategy's convertible debt — and the STRF preferred — stands in line ahead of you.
  • The rate floats down as well as up. 12% is this month's setting, not a coupon. The floor mechanics slow cuts; they don't prevent them.
  • Board discretion. Dividends are cumulative, which is real protection — but they're still paid "when, as and if declared," and arrears are an IOU from a company whose assets are one volatile asset.
  • Concentration. This is a single-company, single-asset (Bitcoin) credit. There is no diversification inside the wrapper.

Score

Real checks, refinanced. Give STRC its due: the payments are real cash, on time, cumulative, and currently backed by a restricted cash reserve and the largest corporate Bitcoin stack on earth — and the June panic proved the support levers actually get pulled. But never mistake the 12% for yield earned by a business. It's yield financed by a treasury — new share issuance and, lately, small Bitcoin sales — and it lasts exactly as long as the refinancing does. Sized like a credit bet on Bitcoin and Saylor's access to capital markets, it's an honest instrument. Sized like a savings account, it's how people get hurt.

Check it yourself: links and sources

Prices, rates, and figures checked October 27, 2026 (Yahoo Finance, Strategy investor briefing and press releases, SEC filings). This post describes a security's mechanics and funding; it is not a recommendation. Not financial advice.

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