Strategy: By 2025, a total of $7.4 billion has been raised through digital lending, with $413 million already paid out in distributions.
BlockBeats News, February 3rd, according to an official announcement, today Strategy announced that, for U.S. federal income tax purposes, the 100% distribution payment made to its preferred equity instrument within the fiscal year 2025 has been recognized as a tax-free capital return to the extent of not exceeding the shareholder's corresponding preferred equity instrument tax basis.
In 2025, Strategy completed a total of five initial public offerings (IPOs) of perpetual preferred stock securities ("digital credits"), raising a total of $5.5 billion. Subsequently, through an At-The-Market (ATM) program, the company raised an additional $1.9 billion in total funds for the digital credit instruments. To date, Strategy has cumulatively paid $413 million in distribution on these instruments, corresponding to a weighted average annualized dividend yield of approximately 9.6%.
Strategy stated that, for U.S. federal income tax purposes, the company currently has no accumulated earnings and profits and is not expected to generate current E&P in the current year and foreseeable future. Based on the above assessment, Strategy expects that the distribution payments on its preferred equity instruments will continue to be treated as a return of capital in the foreseeable future (i.e., 10 years or longer).
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