Strategy Inc Announces Nontaxable Distributions

By Chris Stiles • Monday, February 02 17:49 • Permanent Link

Strategy Inc (NASDAQ: STRF/STRC/STRK/STRD/MSTR; LUXSE: STRE) has announced that all distributions paid during the calendar year 2025 on its preferred equity instruments were treated as a nontaxable return of capital (ROC) for U.S. federal income tax purposes. This treatment applies to the extent of a recipient shareholder's tax basis in their applicable preferred equity instruments, as reported on forms 8937. The company executed five initial public offerings of perpetual preferred equity securities (digital credit) in 2025, raising gross proceeds of $5.5 billion. Additionally, Strategy raised an additional $1.9 billion in aggregate gross proceeds through at-the-market (ATM) programs for its digital credit instruments. The cumulative distributions paid across these instruments amounted to $413 million, representing a blended annual dividend rate of 9.6%. Strategy believes it does not have any accumulated earnings & profits for U.S. federal income tax purposes and does not expect to generate current earnings & profits in the current year or the foreseeable future. The company expects the distributions paid on its preferred equity instruments to be treated as ROC for the foreseeable future, i.e., ten years or more. Following these announcements, the company's shares moved 1.64%, and are now trading at a price of $173.71. For the full picture, make sure to review Strategy Inc's 8-K report.

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