Key Highlights
- Peter Schiff said Strategy (MSTR) is no longer a leveraged Bitcoin investment.
- He argued that continued share issuance is reducing the amount of Bitcoin backing each common share.
- Schiff has repeatedly criticized Strategy’s treasury model, citing rising dividend obligations and increasing dilution risks.
Gold advocate and longtime Bitcoin critic Peter Schiff has renewed his criticism of Strategy Inc. (NASDAQ: MSTR), arguing that the company’s common stock no longer provides the leveraged Bitcoin exposure many investors expect.
In an X post on Thursday, Schiff questioned the rationale for owning MSTR, claiming Strategy’s financing model now works against common shareholders.
According to Schiff, the company’s continued issuance of new shares is reducing the amount of Bitcoin backing each common share. He added that the company has effectively become “a funding source for creditors and preferred shareholders.”
Schiff continues criticism of Strategy’s capital structure
Schiff’s latest remarks build on a series of criticisms he has made in recent weeks regarding Strategy’s capital structure.
Earlier, Schiff warned that MSTR could trade at a wider discount relative to the value of its Bitcoin holdings, arguing that continued dilution may weaken the company’s appeal as a Bitcoin proxy. He also questioned the sustainability of Strategy’s financing model after pointing to reports that dividend obligations tied to its preferred securities had risen from roughly $300 million to $1.2 billion within six months.
At the time, Schiff argued that mounting financial obligations could eventually pressure the company to reconsider Michael Saylor’s long-standing commitment never to sell Bitcoin. His criticism later expanded to Strategy’s preferred stock offerings, with Schiff suggesting investors should pay closer attention to the risks associated with the company’s increasingly complex capital structure.
Institutional interest persists despite criticism
Schiff’s comments come as institutional investors continue increasing their exposure to Strategy. Earlier today, Swedbank increased its MSTR holdings to more than 82,000 shares, adding to its position over the past year and signaling continued institutional interest in the company.
Strategy’s treasury model has also remained under scrutiny from both supporters and critics. Earlier this month, MSTR rebounded above the $100 mark, with analysts citing Bitcoin’s price, capital-raising activity, share buybacks, and the company’s market value-to-net asset value (mNAV) ratio as key factors influencing the stock.
Schiff’s latest criticism focuses on the same issue. He argues that issuing new shares when Strategy trades below the value of its Bitcoin holdings dilutes existing shareholders’ effective Bitcoin exposure. However, supporters maintain that the company’s long-term strategy of accumulating more Bitcoin ultimately outweighs the short-term impact of dilution.
As Strategy continues expanding its Bitcoin treasury through public markets, the debate over whether MSTR remains a leveraged Bitcoin investment, or, as Schiff argues, has evolved into a financing vehicle, is likely to remain a key point of discussion among investors.
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