MSTR Stock Slides After Michael Saylor Pushes Semi-Monthly STRC Dividends

• The amendment requires approval from both MSTR and STRC shareholders before it can take effect.
• According to Strategy, semi-monthly dividends are expected to reduce reinvestment lag, improve liquidity, tighten trading around par value, and create more opportunities for dividend reinvestment. 
• “Help us make STRC even better,” executive chairman Michael Saylor said in a post on X.

Strategy (MSTR) shares plummeted in midday trade on Tuesday after the company proposed paying out semi-monthy dividends on its preferred ‘Stretch’ stock (STRC). 

“Help us make STRC even better,” executive chairman Michael Saylor said in a post on X. The company pitched the proposal as an effort to improve the trading characteristics of STRC and make the product more attractive to income-focused investors. 

“Semi-monthly dividends are expected to lead to smaller ex-date price moves, tighter trading near par, and more reinvestment windows,” Strategy said in a post on X. “It's a better structure.” The company added that shareholders of both MSTR and STRC will need to approve the amendment for the proposal to pass.

MSTR’s Stock Dips Amid US Equities, Crypto Weakness

MSTR’s stock fell as much as 6.5% in midday trade. Retail sentiment around company dipped to ‘neutral’ from ‘bullish’ territory over the past day, while chatter stayed at ‘high’ levels. 

Retail sentiment around STRC on Stocktwits trended in ‘bearish’ territory over the past day, alongside ‘low’ levels of chatter.

The fall in MSTR’s stock came alongside weakness in both the U.S. equities and cryptocurrency markets. Bitcoin (BTC) fell 1.6% in the last 24 hours, but held above the $80,000 mark. Solana (SOL) and Ripple’s XRP (XRP) led losses, down nearly 3% each on the day. 

Meanwhile, the SPDR S&P 500 ETF (SPY) dropped 0.68%, while the SPDR Dow Jones Industrial Average ETF (DIA) slipped 0.03%. The Nasdaq-100 tracking Invesco QQQ Trust (QQQ) took the heaviest hit, tumbling over 1.8%. Retail sentiment around QQQ on Stocktwits trended in ‘neutral’ territory over the past day, accompanied by ‘high’ levels of chatter. 

Matt Mena, crypto research strategist at 21Shares, told The Wall Street Journal that Bitcoin’s ability to remain above key support despite hotter inflation data could point to underlying market strength.

The Largest Corporate Holder Of Bitcoin May Sell Some Of Its BTC

Strategy is the largest corporate holder of Bitcoin with over 818,000 BTC on its balance sheet. The company announced on Monday that it bought 535 Bitcoin over the past week for $43 million after pausing purchases in the prior week. 

Retail traders have been speculating whether or not Saylor has sold any Bitcoin yet after the executive chairman said during the first-quarter earnings call that the company could sell some of its BTC holdings if it improves “Bitcoin per share” metrics or strengthens the capital structure.

Traders are also expecting Bitcoin's price, and by extension MSTR's stock, to get a boost if the CLARITY Act markup expected on Thursday comes through. Saylor said  the cryptocurrency regulation would also provide institutional validation for Bitcoin , broader adoption of MSTR, and a framework for STRC.

MSTR’s stock has gained over 18% this year while, Bitcoin’s price has fallen over 8%. 

Read also: Michael Saylor Says CLARITY Act Markup Could Unlock ‘Next Wave’ Of Digital Capital

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