Strategy plans to increase STRC dividend to 12% and authorizes bitcoin sales

According to Odaily, UK investment advisor Farside Investors stated that Strategy's STRC preferred product carries structural risks related to its adjustable coupon and price stabilization mechanism. STRC is primarily issued at approximately 100 USD, and the mechanism is designed to increase dividends when the price falls below 100 USD and reduce dividends when the price rises above 100 USD to guide the market price back to that level.

Farside Investors noted that if investor concerns about Strategy's credit risk increase, the price of STRC may decline. Raising dividends to support the price would increase cash pressure and further affect investors’ certainty about the security’s valuation. STRC recently traded at around 75 USD before rebounding to 86 USD.

Strategy has introduced the Digital Credit Capital Framework, planning to establish USD reserves, increase STRC dividends to 12%, repurchase preferred securities at a discount, and authorize the sale of Bitcoin to help pay dividends and reserve funds.