Strategy updates preferred stock dividend framework

Strategy Inc (NASDAQ: MSTR) announced modifications to its dividend adjustment framework for its Variable Rate Perpetual Stretch Preferred Stock (STRC Stock). The company updated guidance for when the five-day volume-weighted average price of STRC Stock falls between $95.00 and $98.99.

Under the revised framework, when the five-day VWAP for the five trading days prior to the last trading day of the month reaches $95.00 to $98.99, management intends to recommend a dividend rate increase of 25 basis points or more for the subsequent period.

The complete dividend adjustment framework operates as follows: For STRC Stock trading below $95.00, management would recommend a dividend rate increase of 50 basis points or more. For prices between $99.00 and $100.99, no change is anticipated, though management may recommend minor adjustments of 25 basis points based on market conditions. For prices at $101.00 and above, management would recommend a dividend rate decrease of 25 basis points or larger decreases if SOFR rates declined.

All recommended dividend rate changes require approval from the company's board of directors. The framework aims to maintain STRC Stock trading near its $100 per share stated amount. Strategy noted it may change or suspend this framework at any time.

The dividend adjustment evaluations occur monthly using the five-day VWAP for the five trading days before the last trading day of each month.

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