Analysts from the US-based financial services firm TD Cowen say that planned changes to the STRC preferred share dividend structure by the investment company Strategy could benefit both regular shareholders and stakeholders with significant Bitcoin holdings, such as Strive. Founded in 1989, TD Cowen is widely recognized for its in-depth research and institutional investor analysis.
Dividend payment proposal for STRC
Strategy has proposed doubling its dividend payments for STRC preferred shares, shifting from monthly distributions to twice per month. Company management argues that this change will accelerate the reinvestment of capital, improve market liquidity, and help stabilize prices. Analysts Lance Vitanza and Jonnathan Navarrete described STRC in two consecutive reports as an instrument “offering more price stability, with advantages for liquidity and investor interest.” STRC is also positioned as an additional financing avenue to help Strategy expand its Bitcoin portfolio.
The analyst report included the following statement:
“From the perspective of common shareholders, Strategy is creating the first perpetual, self-financing, publicly traded preferred equity vehicle. This model allows the company to continue accumulating Bitcoin without relying too heavily on traditional funding sources.”
Voting on the STRC changes is open until June 8. If approved, the new dividend payments will start on July 15 and be distributed twice a month going forward.
Earlier this month, TD Cowen lowered its price target for Strategy’s common stock (MSTR) to $350. However, it revised this estimate back up to $385 on Monday. MSTR shares are currently trading near $168, marking a drop of more than 44 percent in the past six months.
Implications for Strive and the broader market
In an additional note published Tuesday, TD Cowen stated that amendments to the STRC model are expected to have both direct and indirect positive effects for Strive. They point to the potential for Strive’s net asset value (NAV) premium to rise as Bitcoin inflows increase. Moreover, added flexibility in capital use under the new model could enhance Bitcoin returns for Strive going forward.
Strive has also taken similar steps in its strategy. The company offers a 12.75 percent dividend on its preferred shares named SATA and has structured this model on STRC, applying it in both Bitcoin purchases and $50 million in STRC acquisitions.
According to analysts, the feedback loop mechanism generated by the launch of STRC has encouraged further Bitcoin purchases and could increase investor interest and capital access for other firms that pursue a similar treasury model.
Earlier this month, TD Cowen reaffirmed its “buy” recommendation for Strive (NASDAQ: ASST), maintaining its price target at $26. ASST shares are currently trading at $15.70 and have surged by more than 50 percent over the last 30 days.
