Strategy’s Dividend Obligations and Financing Strategies

Strategy, known for its Bitcoin holdings, currently manages substantial dividend obligations stemming from its preferred shares – STRC, STRK, STRF and STRD – totaling $588 million annually as of August 26, 2025 . The company employs a multifaceted approach to financing these payouts, balancing common stock issuances, preferred shares, and convertible notes.

The Role of Preferred Shares

Strategy has increasingly relied on preferred shares as a capital-raising tool. Unlike convertible bonds, preferred shares are categorized as equity, despite carrying fixed payment obligations. As of August 25, 2025, Strategy had approximately $8.45 billion in preferred shares outstanding, requiring nearly $900 million in annual dividend payments . A key characteristic of these shares is that they are perpetual, meaning the initial capital doesn’t require repayment, and dividends can be suspended without triggering insolvency, unlike traditional debt.

Dividend Coverage and Cash Reserves

Strategy’s revenue for the first half of 2025 reached $225.55 million, annualized to just over $450 million . After accounting for the cost of revenue ($69.72 million in the first half of 2025), this income falls short of covering the total dividend obligations. To address this, Strategy maintains a cash reserve of $2.25 billion, intended to cover approximately 30 months of interest payments on convertible bonds and dividends on preferred shares.

Financing Methods and Common Stock Issuances

Even as preferred shares play a significant role, Strategy’s primary method of raising capital remains the issuance of common stock, which doesn’t involve fixed payment obligations. Over the past two years, Strategy has raised $16.3 billion through common stock offerings, with over $3.5 billion raised since the beginning of 2025 .

The mNAV Metric and Bitcoin Strategy

Strategy aims to continue raising capital through common stock issuances as long as the company’s market capitalization (mNAV) remains above the value of its Bitcoin holdings, less outstanding convertible bonds and preferred shares. The mNAV calculation is: (Market Capitalization + Convertible Bonds + Preferred Shares) / (Value of Bitcoin Holdings + Cash Reserve). If the mNAV falls below 1x, Strategy would consider selling Bitcoin to raise funds.

The STRC Preferred Share

Strategy introduced the “Stretch” preferred share (STRC) on February 12, 2026, offering an 11.25% annual dividend, payable monthly and . The dividend rate is adjusted monthly to maintain a trading price around its $100 par value, reducing price volatility. As of February 15, 2026, the next record date for STRC is February 28, 2026, with a payout date of February 28, 2026 . STRC is listed on Nasdaq and available through most major brokerage platforms. The aggregate value of STRC preferred stock was $3.4 billion as of early February 2026 .

As of February 2026, STRC’s variable annualized dividend rate is 11.25%, based on a $100 stated amount; however, the current trading price and effective yield may vary, and the rate is subject to monthly adjustment and may be significantly lower. Cash dividends are not guaranteed .