Strategy Buys Back STRC Preferred at Discount, Cuts Dividend Bill

The repurchase comes after Strategy repeatedly increased STRC's dividend in an ill-fated effort to push the shares towards their $100 stated value. The securities have continued to trade below par, limiting the company's ability to issue more of them to fund Bitcoin purchases.

With today's actions, Strategy is accomplishing several things: By cutting the number of STRC outstanding, it makes the remaining ones more valuable and more likely to trade nearer to the intended $100 value.  It also reduces the amount of money the company is obligated to pay in dividends. Finally, by adding money to its reserve set aside to pay dividends, it signals its ability to keep paying those dividends, a move also likely to support STRC's return to par. 

Strategy's shares jumped on the news, rising 6.1% to about $97.21 as of 17:15UTC. The company said future buybacks could be financed through sales of either common stock or Bitcoin (BTC). 

Dividend model falters

Strategy began issuing STRC preferred shares in July 2025 to help fund its Bitcoin purchases. The model worked while Bitcoin and Strategy's common shares were rising, allowing the company to finance preferred dividends through stock sales.

That changed after the October 2025 market crash pushed down Bitcoin, Strategy shares and STRC. Repeated dividend increases failed to return STRC to par, while the weaker common-stock price made it harder to fund payouts without selling Bitcoin.

In May, Strategy eventually dropped its "never sell" stance and began using Bitcoin sales to support the preferred shares issued to finance its Bitcoin accumulation.

Details of the buyback

Strategy said it bought 288,930 STRC shares in the open market between 20 Jul and 26 Jul at an average price of $86.52, spending approximately $25mn. STRC is Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock. Unlike ordinary shares, preferred stock generally carries a defined dividend and ranks ahead of common equity for distributions. The shares are perpetual, meaning they have no fixed maturity date.

The shares have a stated amount of $100 each, meaning Strategy paid about $13.48 below par for every share it repurchased.

At the current 12% annualized dividend rate, each STRC share carries a yearly dividend of $12, subject to board approval. Retiring the shares therefore reduces Strategy's potential annual dividend requirements by about $3.5mn, based on Sandmark calculations.

The discount makes the buyback attractive because Strategy can eliminate those potential future payments without paying the full $100 stated amount for each share.

Approximately $975mn remains available under a wider repurchase programme covering Strategy's preferred securities.

Bitcoin funds obligations

The company said it intends to remain a regular buyer of STRC while it trades below $100, purchasing more at deeper discounts and reducing activity as the price approaches par. It also said it would not issue new STRC shares below $100.

"At prices below $100 per share, STRC repurchases represent an attractive allocation of capital because they can reduce future preferred dividend requirements at a discount. We intend to scale our purchases according to both price and liquidity," said CEO Phong Le in a statement.

Strategy first used Bitcoin to support its preferred-share obligations in May, selling 32 BTC for $2.5mn to fund distributions. 

The sale mattered less for its size than for the change it represented. Strategy had built its corporate identity around accumulating Bitcoin, but the transaction showed that the company was prepared to draw on those holdings to meet the cash costs created by its expanding preferred-share programme. It later sold another 3,588 BTC for about $216mn between 29 Jun and 5 Jul.

Treasury strategy broadens

Strategy also raised its dollar reserve by $525mn to a record $3.75bn through sales of MSTR common stock. The reserve now covers about 25 months of expected preferred dividends and is restricted to paying those distributions and interest on outstanding debt.

The company cannot use that reserve for STRC repurchases. Instead, it may fund future buybacks through additional MSTR issuance or Bitcoin sales.

The move gave Strategy another tool to manage its increasingly complex capital model.