tl;dr
In a bold move, [Company Name] increased the dividend on STRC Preferred Stock to 10.25% while expanding its Bitcoin holdings. However, the strategy faces criticism and regulatory challenges.
**Strategy Adjusts Dividend Rate on STRC Preferred Stock Amid Bitcoin Expansion and Market Scrutiny**
In a recent move signaling confidence in its financial strategy, [Company Name] (referred to as "Strategy" in filings) announced an increase in the annual dividend rate for its Variable Rate Series A Perpetual Stretch (STRC) Preferred Stock, raising it from 10% to 10.25% effective October 1. The adjustment was disclosed in a September 30 SEC filing, with a cash dividend of $0.854166667 per share declared, payable on October 31 to stockholders of record as of October 15. This marks the second dividend hike for STRC in under 30 days, following a prior increase from 9% to 10% on September 2.
The dividend adjustments coincided with Strategy’s continued expansion into Bitcoin, a move that has drawn both attention and criticism. On September 2, the company purchased 4,048 BTC valued at $449.3 million, boosting its total Bitcoin holdings to 636,505 BTC, acquired at an aggregate cost of $46.95 billion. This position represents over 3% of Bitcoin’s capped supply, making it one of the largest corporate holdings of the cryptocurrency.
To fund the purchase, Strategy relied on $425.3 million from Class A common stock sales and $46.5 million through preferred share programs, including offerings of STRK, STRF, and STRD. However, short seller James Chanos criticized the funding structure, arguing that the heavy reliance on common equity over preferred stock suggested weak investor demand for income-focused securities. Strategy countered that demand for preferred stocks remains robust, citing $5.6 billion raised through such offerings in 2025—a figure representing 12% of all U.S. initial public offerings this year.
Launched in July, STRC is a non-convertible, variable-rate preferred stock designed to provide adjustable income. It trades on the Nasdaq alongside Strategy’s other preferred shares and Class A common stock. Despite the dividend increases, the broader crypto treasury sector faces growing scrutiny.
**Bitcoin Treasury Pressure and Regulatory Concerns**
Bitcoin treasury companies are under pressure as investors and regulators question the sustainability of their capital-raising strategies, particularly through private investment in public equity (PIPE) deals. A September 25 CryptoQuant report highlighted that stocks tied to Bitcoin often trade at discounted issuance levels, leading to losses for existing investors.
Examples like Kindly MD—a stock that surged 18.5 times after a May PIPE announcement before collapsing 97% to match its $1.12 PIPE price—illustrate the volatility. Similarly, Strive’s shares have plummeted 78% from 2025 highs, with its $1.35 PIPE price raising concerns about further declines.
Regulatory scrutiny is intensifying. On September 26, reports revealed that U.S. watchdogs, including the SEC, are investigating digital asset treasury companies. The probe focuses on whether these firms or connected individuals benefited from trades executed before official crypto acquisition announcements.
As Strategy navigates these challenges, its dual focus on dividend growth and Bitcoin exposure underscores the complexities of balancing investor returns with the risks inherent in the crypto market. The company’s ability to sustain its strategy will likely depend on both market stability and regulatory clarity.