Seilor Holds the Line: Strategy Confirms Bitcoin Course Amid Investigation and Capital Pressure
Michael Saylor has emerged from the information shadows for the first time in a long while. On June 26, he published a statement on X confirming that Strategy remains committed to its bitcoin strategy. This public appearance comes amid two alarming signals: an investigation by the law firm Rosen Law Firm and growing pressure on the company's capital structure.
Investigation and Saylor's Silence
Lawyers from Rosen Law Firm have initiated proceedings to determine whether Strategy's top management misled investors regarding five securities issuances. No official comments from the company have been made yet. Notably, in his post, Saylor sidestepped this topic. He did not mention the class-action lawsuit from investors or the decline in the value of Strategy's preferred securities. Instead, he emphasized discipline in capital management and long-term value creation, which serves as a direct signal to both shareholders and creditors.
Numbers That Speak Louder Than Words
Strategy holds 847,363 bitcoins on its balance sheet, accounting for over 4% of the total that will ever be issued. The average purchase price per coin stands at around $75,500, notably higher than the current exchange rate. Due to this gap, the premium on MSTR shares, which investors paid for indirect leveraged access to bitcoin, has shrunk. At the same time, interest is growing in how the company finances new purchases.
Strategy purchased most of its bitcoin through several issuances of preferred shares traded on the exchange. These securities are now under pressure due to the weakening bitcoin exchange rate and declining market confidence in the dividend model.
Market Pressure and Schiff's Criticism
The day before Saylor's statement, Peter Schiff once again criticized the weak performance of Strategy's shares. According to him, MSTR shares have fallen 84% from their all-time high, while STRC preferred shares have dropped 25% below par value—their yield reaching 15.3%. Saylor's post appears to be an indirect response to this criticism, though he did not address it directly.
Sustainability Under Question
Questions about the long-term sustainability of STRC are becoming increasingly stringent. Dividend payments on these securities cost approximately $1.2 billion per year, while the company recently disclosed only $1.4 billion in cash reserves—enough for about a year under current conditions. Whether Saylor can restore investor confidence or the investigation escalates to a new legal level will largely determine Strategy's fate in the coming months.
My analysis: The current situation is a classic stress test for a business model built on a single asset. Saylor is betting that bitcoin will survive the current correction, but pressure on the company's capital is growing faster than the market is willing to tolerate. If the bitcoin price does not recover in the coming quarters, the dividend burden could become critical.