Strategy holds firm: Strategy confirms its bitcoin course amid investigation and stock decline
Michael Saylor broke his silence 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 statement came amid several alarming signals: a legal investigation by Rosen Law Firm, a decline in the prices of preferred shares, and growing pressure on the company's capital structure.
Notably, Saylor's post sidestepped both the class-action lawsuit from investors and the collapse in the value of Strategy's preferred securities. Instead, he emphasized discipline in capital management and the creation of long-term value. This signal is directed simultaneously at shareholders and creditors — the market is being told that the fundamental strategy is not changing, despite the turbulence.
The numbers are on Saylor's side, but the market has doubts
Strategy holds 847,363 Bitcoin on its balance sheet, accounting for more than 4% of the total that will ever be issued. The average purchase price of the coins is around $75,500, notably higher than the current exchange rate. This gap has significantly reduced the premium on MSTR shares, which investors previously paid for leveraged indirect exposure to Bitcoin.
At the same time, interest is growing in how the company finances new purchases. The majority of Strategy's Bitcoin was acquired through several issuances of exchange-traded preferred shares. These securities are currently under pressure due to the weakening Bitcoin price and declining market confidence in the dividend model.
Market pressure tests Strategy's resolve
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% from 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.
Questions about the long-term sustainability of STRC are becoming more pressing. 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 to last about a year under current conditions.
My opinion: Saylor is betting that Bitcoin will recover faster than the company's reserves run out. But if regulatory pressure intensifies and the Bitcoin price continues to consolidate below the average purchase price, Strategy may face the need for debt restructuring. The coming months will be decisive in testing the strength of this strategy.