TLDR
- Strategy Inc. jumps 0.72%, unveils STRC preferred stock with 9% yield.
- STRC Stock debuts with 9% yield and flexible terms tied to market moves.
- Strategy’s STRC shares blend crypto aims with 9% yield preferred stock.
- New STRC Stock offers 9% yield, crypto funding, and dynamic protections.
- Strategy launches STRC: a 9% yield preferred with smart redemption rules.
Strategy Incorporated closed July 21 at $426.28, marking a 0.72% increase from the previous day. The stock rose further to $427.90 in after-hours trading. At the same time, Strategy announced an IPO for a new preferred share offering, signaling aggressive financial moves.
The company aims to issue 5,000,000 shares of Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC Stock. It plans to use proceeds for general purposes, including acquiring bitcoin and strengthening working capital. This offering underscores Strategy’s focus on combining digital assets with structured financial products.
The offering is set under an effective shelf registration and will be managed by several major financial institutions. Morgan Stanley, Barclays, Moelis & Company and TD Securities lead the book-running. Other co-managers include The Benchmark Company, Clear Street, AmeriVet Securities, Bancroft Capital, and Keefe, Bruyette & Woods.
STRC Stock Offers 9% Starting Yield with Adjustable Dividend Structure
The STRC Stock will carry an initial 9.00% annual dividend rate, paid monthly beginning August 31, 2025. These dividends are cumulative and will be paid in cash only, as declared by Strategy’s board. The company has the authority to adjust the rate but under specific restrictions.
Dividend reductions must remain within a defined cap tied to market conditions and the one-month term SOFR rate. Moreover, Strategy cannot lower the rate unless all past dividends are fully paid. The firm intends to adjust the yield to keep STRC shares trading near their $100 stated amount.
Unpaid dividends will compound monthly, creating additional obligations until full payment is made. This ensures consistent return expectations for holders and aligns with Strategy’s goal of maintaining market confidence and share value stability.
Redemption Rights Offer Flexibility to Strategy and Holders
Strategy can redeem STRC shares at $101 plus any unpaid dividends once the stock lists on a major exchange. The company may conduct partial redemptions only if at least $250 million of STRC remains outstanding. It also retains rights to execute complete redemptions under certain conditions.
A “clean-up” redemption can occur if less than 25% of originally issued STRC shares remain outstanding. Strategy may also redeem all shares due to tax events under a “tax redemption” clause. Redemption pricing in these cases includes full unpaid dividends and the liquidation preference.
If a “fundamental change” occurs, holders can demand repurchase of their shares at $100 plus accrued dividends. This provision adds a layer of protection in case of corporate events. It ensures liquidity options and exit strategies for participants in dynamic market situations.
Liquidation Preference Adjusts Based on Trading Activity
The STRC Stock’s liquidation preference will adjust daily based on trading and issuance activity. The value will always reflect the highest among the $100 base, recent trade prices, or average pricing over ten days. This structure protects holders from sudden devaluation.
If Strategy issues STRC shares through sales, the share value resets to the prior day’s last trade price. Otherwise, the system averages recent market data to determine fair liquidation value. This method stabilizes expectations and keeps the preferred shares anchored to real-time market behavior.
Strategy’s pricing mechanics aim to foster market consistency and limit volatility. The company will also keep all liquidation values transparent and based on publicly reported sale prices. This approach reinforces its intent to maintain shareholder trust and structured capital management.
