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Dividend stays at 12%
Strategy is maintaining the 12% dividend on its STRC preferred stock, and CEO Phong Le said Strategy’s Corporate Objective is for STRC to trade at $99–$100 over time.
“Strategy is maintaining the 12% dividend on its high-yielding STRC preferred stock.”
The company said holders of Strategy’s high-yielding STRC preferred stock will not see a dividend increase in August, even as STRC investors had been expecting as much as a 50-basis-point hike.
CoinDesk also tied the dividend decision to Strategy’s past pattern of raising the payout when the previous month’s trading price was significantly below par ($100), including a 50 basis points increase as recently as July 1 after June’s plunge in STRC to as low as $71.
In the same period, Strategy’s sale of some bitcoin to fund dividends and stabilization in bitcoin helped STRC bounce in July to the current $89.46, though that level remains significantly below par.
Cash, reserves, and obligations
The Motley Fool said Strategy has gone five weeks without a Bitcoin acquisition, with its last reported purchase during the week of June 15 through June 21 when it bought 520 BTC for $35 million.
That pause comes as Strategy raised the Stretch dividends to 12% on July 1, and the article said Strategy has $1.76 billion in annual dividend payments and interest on its debt.
The Motley Fool also reported Strategy’s current reserves of $3.75 billion exceed a requirement to cover at least 12 months of expected annual dividend payments and interest expenses, describing that as covering over two years of expenses.
In parallel, it said Strategy needs to manage other financial obligations because its trailing revenue is $490 million and its software business does not bring in nearly enough money to fund its obligations.
Earnings show bitcoin drag
Strategy reported second-quarter results that missed Wall Street expectations, with TradingView citing revenue of $122.4 million slightly below analysts’ estimates of $122.9 million and a loss of $24.45 per share versus a $2.19 per-share loss expectation.
“The company attributed the quarterly loss to a "meaningful bitcoin price decline"”
In the same earnings context, TradingView said Strategy attributed the quarterly loss to a "meaningful bitcoin price decline" alongside "muted bitcoin sentiment and market skepticism," while 24/7 Wall St. described an $8.32 billion unrealized bitcoin markdown driving an $8.22 billion Q2 net loss.
매일경제 reported Strategy recorded $122.4 million in sales, $8.33 billion in operating losses, and $8.62 billion in net losses, saying the main cause was unrealized loss of fair value due to the decline in the market price of Bitcoin.
That outlet also said Strategy bought 83,901 Bitcoin net at an average unit price of $75,539 during the second quarter, while Bitcoin fell to $58,714 at the end of the second quarter, costing about $8.3 billion in valuation losses.
