Net Loss of $8.2 Billion... Strategy (MSTR) Freezes Preferred Stock Dividend Rate at 12%

▲ Strategy (MSTR), Bitcoin (BTC), STRC/AI generated image

Strategy (MSTR) has frozen the August dividend rate for its preferred stock STRC at 12%. STRC closed at $89.46, more than $10 below its par value of $100.

According to Cointelegraph on August 2 (local time), Strategy Chairman Michael Saylor announced that the August dividend rate for STRC would not be increased. Saylor introduced STRC as an investment vehicle that can increase income. August is the second month that STRC dividends are paid twice a month.

STRC closed trading at $89.46 on the 31st of last month. Although it rose by 5.42% during July, it fell significantly short of its par value of $100. Strategy had previously adjusted the July dividend rate to 12%, an increase of 0.5 percentage points, reflecting the sluggish stock performance in June.

Strategy CEO Phong Le stated, "The company's goal is for STRC to trade at $99-100 in the long term." However, he did not specify when the target price would be reached. This means that the dividend rate was not further increased even though STRC remained below par value.

Strategy recorded a net loss of $8.22 billion in the second quarter. Unrealized losses from its Bitcoin (BTC) holdings amounted to $8.32 billion. The company has set aside $3.75 billion in dollar reserves to support preferred stock dividends and interest payments. This amount is sufficient to cover payment obligations for over two years.

Strategy repurchased $25 million worth of STRC at a price below par value. The company plans to continue additional purchases as long as the STRC price remains below $100. Saylor hinted at a possible announcement regarding changes in Bitcoin holdings, stating "Bitcoin drive activated" on X (formerly Twitter).

[Key Article Summary]

-Strategy froze the August dividend rate at 12% despite STRC remaining at $89.46.

-Strategy recorded a net loss of $8.22 billion in the second quarter.

-The company plans to prepare $3.75 billion in reserves and make additional purchases of STRC below par value.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*