Strive Announces Daily Cash Dividends on Preferred Stock
Strive, a firm involved in Bitcoin investments, announced on Thursday an innovative move to offer daily cash dividends on its Variable Rate Series A Perpetual Preferred Stock (SATA), setting a precedent as the first U.S.-listed vehicle of its kind. CEO Matt Cole referred to this development as a “zero-to-one innovation,” which will take effect starting June 16.
Details of the SATA Offering
The SATA, which was launched on the Nasdaq last November, is currently offering an annual dividend rate of 13%. As the company shifts its payout schedule from monthly to daily, it anticipates that the effective annual yield will rise to 13.88% due to more frequent compounding, according to their latest investor presentation.
This transition is representative of a trend among companies that invest in Bitcoin, which are increasingly exploring dividend-paying options as a strategy to bolster their asset bases. Strive’s SATA model was inspired by Strategy’s STRC, which has been providing an 11.5% monthly payout since its introduction in July.
Financial Performance and Bitcoin Holdings
Strive disclosed its plans for SATA in conjunction with its first-quarter earnings report, which revealed a net loss of $265.9 million for the period ending March 31; this figure was primarily attributed to a decrease of $295.8 million in the value of its Bitcoin assets. The company currently holds 15,009 Bitcoin, securing its position as the ninth-largest corporate Bitcoin holder globally, with the total value approximated at around $1.2 billion, given the current Bitcoin price of approximately $81,500.
After announcing its first Bitcoin acquisition last September, Strive’s stock saw a significant downturn of 86%, slipping from $130 to about $17.60 recently, despite a temporary rise of more than 5% following the dividend announcement. In a proactive measure, Strive indicated it has repurchased its long-term notes used for acquiring additional Bitcoin, effectively clearing outstanding debts and stating that SATA is now its sole means of “amplification” backed by Bitcoin.
Related Developments in the Industry
Elsewhere, the related firm Strategy revealed plans to put forward a vote to its shareholders aimed at changing the payment frequency of STRC dividends from monthly to semi-monthly, which aims to stabilize its value. The Strategy product has proven popular among Bitcoin-focused firms and individual investors alike.
In addition to its substantial Bitcoin reserves, Strive reported ownership of significant assets: $50.5 million in STRC and $87.6 million in cash and equivalents. Cole communicated updates about the company’s performance through a post on X, with Strategy’s co-founder, Michael Saylor, acknowledging them as impressive.
