Key Highlights
- Peter Schiff says Saylor may need to sell more Bitcoin and MSTR shares to support STRC.
- Strategy sold 1,690 BTC for $108.6 million and used the money to buy back STRC shares.
- STRC is still trading below $95 despite Strategy’s recent buybacks.
Bitcoin critic Peter Schiff said that Michael Saylor, the founder of Strategy, the largest Bitcoin holding firm in the world, may still need to sell more Bitcoin and MSTR shares again to support Strategy’s STRC preferred stock.
This is coming just a few days after the company sold another portion of its holding between August 3 and August 9, with the money used to buy back STRC shares.
“Despite selling Bitcoin and $MSTR to raise cash and buy back $STRC, STRC is still trading below $95,” Schiff said in a post on X. He added that Saylor “is going to have to sell a lot more Bitcoin and discounted common stock” to raise STRC to $100. He called the situation “bad news for Bitcoin and MSTR.”
STRC remains below $100
Strategy has been using both its sales from Bitcoin and its MSTR shares to raise money. In the latest week, the company sold 1,690 BTC at an average price of $64,262 per coin. The full $108.6 million from the sale went toward buying back 1,152,020 STRC preferred shares.
STRC is designed around a $100 stated value, but it has continued to trade below that level. The recent buyback was Strategy’s third under its $1 billion Digital Credit Securities Repurchase Program. The company is using the program to buy back STRC shares while the preferred stock remains below its stated value.
Strategy is also raising money through its common stock. During the recent week, the company sold about 6.59 million MSTR shares for $653.1 million. It directed about $650 million of that money into its dollar reserve, which reached $4.65 billion.
Strategy has sold Bitcoin before
Between July 27 and August 2, the company sold 1,638 BTC for $104.73 million. Part of the proceeds went toward preferred dividends, while another $52.3 million was used for STRC buybacks.
That earlier sale followed Strategy’s first Bitcoin sale in years. Between May 26 and May 31, the company sold 32 BTC for $2.5 million to help fund STRC dividends. The company later bought 520 BTC after raising money through MSTR share sales.
Schiff is an open critic of Strategy
Schiff has been warning about this situation for months. In June, he said Saylor could eventually be forced to sell Bitcoin if MSTR continued to fall. His argument was that a growing gap between Strategy’s market value and the value of its Bitcoin holdings could put pressure on the company to sell BTC and buy back its shares.
Strategy has continued to hold a large Bitcoin reserve despite the sales. As of August 14, it holds 840,447 BTC, according to the data from Bitcoin Treasuries.
For Schiff, however, the latest sale shows that Strategy may need to keep using Bitcoin to support STRC. His latest warning is that if STRC does not return to $100, Saylor could need to raise even more cash through Bitcoin sales and MSTR share issuance.
Also Read: Metaplanet Launches BitBonds Program to Back its Bitcoin Strategy
