Strategy keeps STRC preferred dividend at 11.5%, reinforcing high-yield funding for its bitcoin bet

Strategy Inc., the bitcoin-heavy holding company formerly known as MicroStrategy, moved this week to keep paying double-digit yields on a key class of preferred stock, underscoring how the company continues to use high-cost capital to fuel its growing bet on the world’s largest cryptocurrency.

Dividend rate held at 11.5%

In a Form 8-K filed with the Securities and Exchange Commission on Tuesday, the Tysons Corner, Virginia-based company said its board voted March 31 to maintain the regular dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock—known by the ticker STRC—at 11.5% per year. The filing also disclosed a new monthly cash dividend and signaled that, like past payouts, the company expects it to be treated as a return of investors’ own capital rather than taxable income.

The company reported that for the monthly period ending April 30, it will pay a cash dividend of $0.958333333 per STRC share—the monthly equivalent of an 11.5% annual rate on the security’s $100 stated amount. The dividend is payable April 30 (or the next business day) to shareholders of record as of 5 p.m. Eastern time on April 15.

“As of April 1, 2026, the Company expects that the dividend on the Series A Stretch Preferred Stock payable on April 30, 2026 will be treated, for U.S. federal income tax purposes, as a non-taxable return of capital to the extent of a stockholder’s tax basis,” Strategy said, adding that stockholders “should consult their own tax advisors regarding the tax consequences of the ownership and disposition” of the shares.

Return-of-capital treatment, and what it means

The April announcement extends a pattern that has been in place since the security’s launch. In earlier tax disclosures, Strategy said all distributions made on its preferred stock in 2025 were classified as nondividend returns of capital for U.S. federal tax purposes—reducing investors’ cost basis in the shares but not taxed as ordinary income at the time of payment.

Legally, return-of-capital payments are permitted under the tax code and are common among certain investment vehicles. Economically, they often reflect that cash is being paid out from contributed capital or asset sales rather than from retained corporate earnings.

A new preferred structure designed to trade near par

STRC is a relatively new instrument. Strategy—then still widely known under its MicroStrategy brand—first issued the security in an underwritten offering on July 29, 2025, selling roughly 28 million shares at $100 each and raising about $2.5 billion in gross proceeds.

The stock has a $100 stated amount, pays cumulative monthly dividends in arrears, and has no fixed maturity. Dividends are “regular dividends” declared by the board, not an obligation in the way that interest on debt would be, though unpaid amounts accumulate.

Since the launch, the company has steadily increased the rate on STRC as it sought to keep the security trading near par. Company materials show the dividend began at 9% annualized in its first month and was raised in multiple steps—to 10%, 10.25%, 10.5%, 10.75%, 11%, and 11.25%—before reaching 11.5% by early 2026. The April filing keeps that rate unchanged for at least another month.

To manage investor expectations, Strategy has publicized a “dividend adjustment framework” that uses the volume-weighted average price of STRC as a guide. Under that framework, if the stock trades below $95, management would generally recommend increasing the dividend rate by at least 0.50 percentage point in the next period. If it trades well above $100, the company would favor lowering the rate and potentially issuing more shares. The framework is not binding, but it is intended to help stabilize the trading price around the $100 stated amount.

As of Tuesday, that approach appeared to be working. Real-time market data showed STRC changing hands essentially at par, near $100, with only a few cents of intraday fluctuation.

A balance sheet built around bitcoin

Behind the preferred stock is a balance sheet that looks very different from most corporate issuers on Nasdaq.

Strategy has said it views bitcoin as its “primary treasury reserve asset” and has spent years accumulating the token using proceeds from common stock offerings, multiple series of preferred shares, and several rounds of debt, including convertible notes. As of Feb. 1, 2026, the company reported holding 713,502 bitcoin at a total cost of about $54.26 billion and a fair value of roughly $59.75 billion at then-prevailing market prices.

To support the obligations created by its preferred stock and debt, Strategy has also built what it calls a U.S. dollar reserve. As of early February, that reserve stood at about $2.25 billion, which the company said was designed to cover approximately 2.5 years of preferred dividends and interest payments. Strategy has said it aims to keep that coverage ratio in a two- to three-year range, though maintaining the reserve at any particular level is at management’s discretion.

In 2025 alone, Strategy raised approximately $25.3 billion in capital—largely through sales of common stock and its various preferred series—according to its financial reports. For STRC specifically, the company established an at-the-market offering program that allows it to sell new shares into the market over time. By early 2026, it had sold several million STRC shares through that facility, bringing in hundreds of millions of dollars, and still had several billion dollars of capacity remaining.

Ratings scrutiny and disclosure via a web dashboard

The scale and structure of the balance sheet have drawn attention from credit analysts. S&P Global Ratings has assigned Strategy a B-minus issuer credit rating with a stable outlook, citing the company’s heavy exposure to bitcoin prices, reliance on capital markets, and use of leverage. The agency has said the firm’s U.S. dollar reserve is a positive factor but does not fully offset the risks associated with holding such a large concentration of a volatile asset.

The April 1 filing also highlighted how Strategy intends to communicate risk and its evolving position in near real time.

Under Item 7.01 of the 8-K, which covers Regulation Fair Disclosure, Strategy pointed investors to its online “Strategy Dashboard” as a channel for distributing material information. The company said the dashboard, hosted on its corporate website, is used to provide broad, nonselective access to data such as market prices of the company’s securities, its bitcoin purchases and holdings, key performance indicators, and other supplemental information.

Information furnished under Item 7.01 is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act, the company noted, meaning it is not automatically subject to certain liability provisions and is not incorporated by reference into registration statements unless specifically stated. Even so, the explicit designation of a web dashboard as a core disclosure tool signals that investors may need to monitor the site, in addition to periodic SEC reports, to stay informed about Strategy’s bitcoin purchases, capital raising, and other metrics.

What investors are weighing

The preference for a digital dashboard reflects both the nature of Strategy’s assets and its investor base. The company’s common stock, which retains the ticker MSTR, is widely followed as a proxy for bitcoin exposure. Its preferred shares, including STRC and other series such as STRF, STRK, and STRD, have been used by institutional and individual investors seeking high yields with indirect crypto exposure.

For holders of STRC, the combination of a double-digit dividend rate and expected return-of-capital classification has created what some market participants describe as a tax-efficient income stream. But the company’s own risk disclosures stress that the characterization of future distributions may change and that the dividend level itself is not guaranteed.

In a standard forward-looking statements section, Strategy warned that statements regarding tax treatment of dividends, future dividend levels, and its bitcoin acquisition strategy are subject to risks and uncertainties, and it pointed readers to the “Risk Factors” section of its most recent annual report, filed Feb. 19.

Those risks include potential changes in tax law or Internal Revenue Service interpretations, volatility in bitcoin prices, the company’s ability to access capital markets on acceptable terms, and broader macroeconomic conditions.

For now, the latest 8-K offers a snapshot of a complex arrangement: a public company using a carefully calibrated preferred stock structure to pay out more than 11% a year in cash, while channeling the proceeds of those and other securities into a concentrated, long-term bet on bitcoin. Whether that structure proves resilient will depend on the very forces—crypto markets, investor appetite for yield, and regulatory scrutiny—that have made Strategy’s filings closely watched well beyond the world of business software.