Michael Saylor demonstrates unwavering loyalty to Bitcoin amid the legal storm surrounding Strategy
Michael Saylor, co-founder and visionary of Strategy (formerly MicroStrategy), broke a long silence to publicly reaffirm the company's commitment to Bitcoin. On June 26, he posted on social media platform X, stating that Strategy continues to focus on "high credit quality and long-term value creation." This statement came amid several serious challenges: an investigation by the law firm Rosen Law Firm and growing pressure on the company's capital structure.
Legal Risks and Market Pressure
The situation surrounding Strategy is intensifying. Rosen Law Firm has launched an investigation to determine whether top executives misled investors regarding five securities offerings. The company has not yet issued any official comments. In his post, Saylor sidestepped this issue, emphasizing discipline in capital management. This telling omission sends a signal to both shareholders and creditors: the current volatility is merely a test that the company will overcome through strategic endurance.
Strategy holds 847,363 BTC on its balance sheet—more than 4% of all Bitcoin that will ever be issued. The average purchase price is approximately $75,500 per coin, significantly higher than the current market rate. This gap has led to a reduction in the premium on MSTR shares, which investors paid for indirect leveraged access to Bitcoin. At the same time, interest is growing in how the company finances new purchases.
Critical Moment for Preferred Securities
The majority of Bitcoin was acquired through several issuances of preferred shares traded on the exchange. These securities are now under significant pressure due to Bitcoin's weakening price and declining market confidence in the dividend model. The day before Saylor's statement, prominent critic Peter Schiff once again pointed out the weak performance of Strategy's stock. According to his data, MSTR common shares have fallen 84% from their all-time high, while STRC preferred shares have dropped 25% from par value, with their yield reaching 15.3%.
Paying dividends on the preferred shares costs the company approximately $1.2 billion per year, while recently disclosed cash reserves total only $1.4 billion. This is enough for about a year under current conditions. Questions about the long-term sustainability of STRC are becoming increasingly pressing.
Cryptalist Analytical Conclusion: Saylor is betting that Bitcoin will recover faster than the company's cash reserves run out. However, the legal investigation is not just market noise. If Rosen Law Firm finds evidence of misleading investors, it could lead to serious financial and reputational consequences. Currently, Strategy's fate depends on two factors: the speed of BTC's price recovery and the outcome of the investigation. In the coming months, we will see whether Saylor's structure can withstand this stress test.