MSTR: Schiff Calls Saylor’s Bitcoin Strategy a ‘Fraud’!

Overview – Bitcoin Bet Under Fire

MicroStrategy (NASDAQ: MSTR) – recently referred to simply as “Strategy” – has transformed from an enterprise software firm into the world’s largest corporate holder of Bitcoin (^[1]) (^[2]). Executive Chairman Michael Saylor’s aggressive Bitcoin-only treasury strategy, launched in 2020, has seen the company amass well over 600,000 BTC (over $60 billion in crypto assets) through a series of debt and equity raises (^[1]) (^[3]). This high-stakes pivot catapulted MicroStrategy’s market value far beyond the value of its Bitcoin holdings during crypto’s peak, reflecting intense speculative optimism (^[4]). It even earned the stock a spot in the Nasdaq-100 index amid surging prices (^[2]).

However, the strategy’s risks have drawn sharp criticism. In November 2025, noted gold investor and Bitcoin skeptic Peter Schiff lambasted Saylor’s approach, flatly declaring that “MSTR’s entire business model is a fraud” and predicting the company “will eventually go bankrupt” (^[5]). Schiff challenged Saylor to publicly debate his assertion, underscoring the growing scrutiny of MicroStrategy’s sustainability. His critique highlights the core concern: MicroStrategy has essentially become a leveraged Bitcoin investment vehicle, exposing shareholders to extreme crypto volatility and raising questions about how long Saylor’s “Bitcoin forever” conviction can hold (^[6]). Below, we examine the company’s dividends, leverage, valuation, and key risks to evaluate these concerns.

Dividend Policy and Yield

No Cash Dividends on Common Stock: MicroStrategy has never declared or paid a cash dividend on its common shares (^[3]). Saylor’s philosophy has been to reinvest and hoard Bitcoin rather than return cash to shareholders. Consequently, MSTR’s dividend yield on common stock is 0%, and traditional income metrics like FFO/AFFO do not apply (the company’s crypto holdings produce no operating funds or yield). This policy reflects the company’s focus on capital appreciation via Bitcoin price gains, not income generation.

Introduction of Preferred Shares: While common shareholders receive no payouts, MicroStrategy in 2025 began issuing high-yield perpetual preferred stock to raise capital. Several Series A preferred classes – nicknamed “Strike,” “Strife,” “Stride,” etc. – carry fixed dividend rates of ~8%–10% (^[3]). For example, the 8.00% STRK preferred and 10.00% STRF series were sold to investors seeking yield, obligating MicroStrategy to pay sizable quarterly cash dividends on those shares (^[3]). These instruments gave the company new fundraising channels (neither common equity nor traditional debt) (^[1]). Notably, the preferred dividends are non-cumulative, meaning if MicroStrategy skips a payment, it does not owe the missed amount later. This structure gives management flexibility, but as discussed later, it also raises concerns about the reliability of those “promised” yields (^[7]) (^[7]).

Dividend History: In the first half of 2025, MicroStrategy paid out roughly $58 million in preferred dividends (e.g. $32.6 million on STRK and $25.5 million on STRF) (^[3]). These payouts, funded by cash reserves (not by any crypto income), are now a fixed financial burden. Schiff points out that because dividends on these preferreds are declared at the company’s discretion and do not accumulate if unpaid, “undeclared dividends don’t accumulate…they are lost forever” (^[7]). In other words, MicroStrategy can suspend those payouts without legal default – a flexibility that could be exercised in a cash crunch, but at the cost of angering income-focused investors. So far, the company has maintained the payments, but the common stock still yields nothing, consistent with MicroStrategy’s all-in growth strategy.

Leverage and Debt Maturities

Convertible Bond-Fueled Bitcoin Purchases: MicroStrategy’s Bitcoin war chest was largely financed by low-interest convertible bonds. As of mid-2025 the company had about $8.2 billion of convertible senior notes outstanding, with maturities staggered from 2028 through 2032 (^[3]) (^[3]). These notes were issued in private offerings during the 2020–2021 crypto boom and afterward. Notably, many carry minimal or zero coupon rates – for example, $1.01 billion of 0.625% notes due 2028, $3.00 billion of 0% notes due 2029, and others at 0.625%, 0.875%, etc. (^[3]) (^[3]). This kept annual cash interest expense relatively low. Earlier issues have already been addressed: the company’s initial $1.05 billion of 0% convertible notes due 2027 were fully converted to equity in early 2025 as MicroStrategy’s soaring share price hit conversion thresholds (^[3]). That conversion eliminated near-term debt repayment pressure at the cost of diluting common shareholders (over 1 million new shares were issued for the 2027 notes) (^[3]).

Total Debt and New Financing Methods: MicroStrategy’s total debt (mostly these convertibles) was about $10–11 billion in 2025 (^[8]), a substantial leverage load relative to its legacy business. To avoid taking on straight debt or excessive dilution, Saylor turned to the innovative preferred equity described above (^[1]). By mid-2025 the company had issued roughly $1.3 billion+ in perpetual preferred stock (at par value) across the various 8–10% yield series, as estimated from dividend payouts (^[3]). These preferred shares, while technically equity, function similarly to debt in that they obligate MicroStrategy to make regular cash distributions (though with discretion on suspension). They were marketed as “bitcoin-backed” financing instruments – effectively using the value of MicroStrategy’s cryptocurrency holdings to attract capital without incurring secured loans (^[1]). The combination of convertible bonds and preferred stock has dramatically leveraged the company’s balance sheet in service of buying more Bitcoin. Every additional dollar of debt or preferred equity was used to acquire more BTC, increasing both asset holdings and financial liabilities.

Maturity Profile: The earliest major debt maturity is now in 2028, since the 2027 notes are off the books. Between 2028 and 2032, MicroStrategy will face staggered balloon repayments or conversions if those notes aren’t refinanced or turned into equity. The bulk of principal ($3.0 billion) comes due in 2029 (0% coupon), with other significant notes in 2030, 2031, etc. (^[3]) (^[3]). Given the notes’ convertibility, actual repayment may not be required if MicroStrategy’s share price remains high – noteholders could choose to convert into stock (as happened with the 2027 notes). Indeed, during 2025 some conversions already occurred, reducing debt in exchange for new shares (^[3]). This built-in dilution is a trade-off: if Bitcoin’s price and MSTR’s stock keep climbing, debt will vanish (converted to equity) but common shareholders get diluted; if the stock stays low, the debt remains and will eventually require cash repayment. Overall, MicroStrategy’s long-term debt maturity schedule appears manageable on paper (no imminent cliffs), but it hinges on continued market confidence in the company’s equity value to either refinance or trigger conversions down the road.

Coverage and Liquidity

Cash Flow vs. Fixed Charges: A critical challenge for MicroStrategy is that its Bitcoin assets produce no cash flow – no interest, no dividends. Its legacy software analytics business generates some revenue, but it is relatively modest and eclipsed by the scale of the Bitcoin bet. Meanwhile, the company now faces sizable fixed charges: interest on its debt (albeit low-rate, roughly <$60 million per year by estimation) and especially the dividends on its preferred stock, which amount to over $100 million annually and could grow if more preferreds are issued (^[3]). Can MicroStrategy cover these obligations with internal resources? In recent quarters, operating income from software and services was not nearly enough to cover hundreds of millions in financial expenses. In fact, critics argue that MicroStrategy must keep tapping external capital just to meet its obligations. Peter Schiff alleges that Saylor has been forced to sell new stock simply to “buy U.S. dollars” to fund interest and dividend payments – rather than to invest in more Bitcoin (^[9]). This insinuates a Ponzi-like dynamic where new investor money is needed to pay returns to earlier investors (in this case, servicing debt and preferred yields). While the company disputes such a characterization, the underlying math is worrying: without fresh financing or asset sales, MicroStrategy’s cash burn could become unsustainable if Bitcoin prices stagnate or fall.

USD Reserve for Coverage: Acknowledging these constraints, MicroStrategy has taken steps to reassure investors about its liquidity. By late 2025, Saylor’s team established a dedicated “USD Reserve” of $1.4 billion in cash (^[4]). This reserve is explicitly meant to cover at least 12 months of interest and dividend obligations, with a goal of extending that to 24 months (^[4]). In other words, even if Bitcoin’s price were to drop and the company’s ability to raise new funds dried up, MicroStrategy has set aside enough dollars to keep servicing its debts and preferred dividends for one to two years. This was a direct response to the volatility: in 2025, a one-third drop in Bitcoin’s price caused MicroStrategy’s share price to halve and sparked fear over its ability to meet fixed commitments (^[4]). Saylor’s message to the market is that the company can weather an “80–90% drawdown” in Bitcoin without being forced to liquidate holdings (^[9]). Indeed, MicroStrategy asserts it has “engineered” its balance sheet to survive extremely deep crypto winters (^[9]) – for example, using only long-dated debt and having no margin loans after retiring a prior secured loan.

Coverage Ratios: Traditional coverage ratios (like EBITDA/Interest) are not very meaningful for MicroStrategy now, given the dominance of Bitcoin on the balance sheet and the new fair-value accounting swings. On a GAAP basis, the company’s net income is wildly volatile – it posted a $4.2 billion net loss in Q1 2025 due to an unrealized loss on Bitcoin when prices dipped (^[10]), then a $10 billion profit in Q2 2025 when crypto prices surged to new highs (^[2]). Neither figure reflects the steady-state operating cash flow, which is much smaller. A more pertinent measure is whether MicroStrategy can cover its fixed expenses through either operating cash flow or existing liquid assets. With interest expense relatively low (thanks to low coupon debt) and a hefty cash buffer now in place, short-term coverage appears adequate. The company explicitly stated it does not anticipate needing to sell any Bitcoin in the next 12 months for liquidity (^[3]), relying instead on fiat reserves and any software segment cash flows. Over the longer term, however, MicroStrategy’s ability to cover obligations relies on external factors: sustained investor willingness to buy new stock or preferred shares, or a sufficiently high Bitcoin price that the company can refinance or even sell a fraction of holdings at a profit if needed. This delicate balance is at the heart of Schiff’s warning – if investor sentiment turns such that MicroStrategy can no longer issue equity or preferreds on favorable terms, its funding mechanism could unravel (^[7]) (^[7]).

Schiff’s “Death Spiral” Scenario: The most dire liquidity scenario painted by skeptics is what Schiff dubs a potential “death spiral.” Because the preferred equity is non-cumulative and dividends can be withheld at management’s discretion, Schiff argues that income-focused investors might flee if they realize the yield is not guaranteed (^[7]) (^[7]). In a social media post, he noted that MicroStrategy’s ability to keep selling those high-yield preferred shares could “unravel fast” once fund managers conclude that the advertised yields “will never actually be paid” consistently (^[7]). If such investors dump the preferreds, MicroStrategy’s capacity to raise new cash (to fund operations or buy more BTC) would dry up (^[7]). That, in turn, could force the company to halt dividends entirely or sell Bitcoin at an inopportune time, further eroding confidence. The feedback loop could rapidly drive down both the preferred and common stock prices – hence a self-reinforcing downward spiral (^[7]). While this is a hypothetical worst case, it underscores how dependent MicroStrategy’s strategy is on market confidence. So long as investors believe in Saylor’s vision and Bitcoin’s long-term appreciation, the company can raise or reserve enough cash to meet obligations. But if that belief falters, coverage could quickly become untenable.

Valuation and Bitcoin Holdings

Premium to Net Asset Value: Despite essentially functioning as a Bitcoin holding company, MSTR’s stock has often traded at a substantial premium to the value of its underlying Bitcoin. In mid-2025, short-seller Jim Chanos pointed out that MicroStrategy’s market capitalization (around $108 billion in June) was about 1.74× the $62 billion market value of its Bitcoin stash (^[1]). In other words, investors were paying a ~74% premium over the current Bitcoin holdings per share. Even after factoring in MicroStrategy’s roughly $11 billion of debt, the stock still traded significantly above net asset value (BTC minus debt) (^[8]). This is highly unusual, since one might expect a company that simply holds Bitcoin (and some software operations) to trade near the liquidation value of its assets, or even at a discount due to overhead and risk. Instead, at the peak of crypto enthusiasm MicroStrategy’s valuation soared far beyond its asset NAV, buoyed by speculative demand for any Bitcoin-linked equity (^[4]). Some analysts saw this as an arbitrage opportunity – for example, MoneyWeek in late 2025 highlighted MSTR’s 40%+ premium to bitcoin value and recommended shorting MSTR stock while going long Bitcoin to profit as that gap potentially closes (^[8]). Chanos likewise called Saylor’s valuation logic “financial gibberish” and suggested the disparity was unjustified (^[1]).

Rationale for the Premium: Why would MicroStrategy deserve a premium at all? A few possible explanations: (1) Investors may be valuing the company’s ability to acquire and hold Bitcoin at scale – effectively paying for Saylor’s “operational alpha” in raising cheap capital (e.g., 0% convertibles) to buy BTC. (2) Some bulls might see additional franchise value in MicroStrategy’s software business or Saylor’s leadership (though the software segment is a small contributor now). (3) During times when a spot Bitcoin ETF was not yet approved or widely available, MSTR served as a proxy investment for institutions to get Bitcoin exposure via an SEC-regulated stock. This “scarcity value” may have driven shares above NAV. However, by late 2025 the landscape was changing – major Bitcoin ETFs had launched and were gaining traction, such as BlackRock’s iShares Bitcoin Trust (ticker IBIT) approaching $100 billion in assets within two years (^[9]). The availability of direct Bitcoin investment vehicles could erode MSTR’s premium, as investors no longer need to pay a high markup for a “backdoor” Bitcoin play. Indeed, after crypto prices pulled back from all-time highs, MicroStrategy’s premium began to narrow. The stock fell from over $600 to around $300 when Bitcoin retraced by ~30% in late 2025 (^[4]). Many peer companies that imitated MicroStrategy’s strategy saw their shares drop below the value of their crypto holdings in this period (^[4]). MicroStrategy itself still traded slightly above NAV at that time, but far less extravagantly than at the peak.

Valuation Metrics: Traditional valuation multiples (P/E, EV/EBITDA, etc.) are not very meaningful for MicroStrategy now due to the dominance of Bitcoin gains/losses on its financials. For instance, the company’s trailing P/E swung from negative (during loss quarters) to an absurdly low single-digit (after the $10 billion one-time gain in Q2 2025), neither of which reflects ongoing reality. A more apt metric is Price-to-Bitcoin: essentially, how MSTR’s stock price compares to its per-share Bitcoin holding. As of late 2025, each MicroStrategy share effectively represents a claim on roughly 2.2 millions satoshis (i.e. about 0.022 BTC per share, given ~264 million shares outstanding and ~582k–640k BTC held) – an ever-increasing figure as the company issues new shares and buys more Bitcoin (^[3]) (^[3]). If one divides the stock price by the underlying BTC per share, one can see if there’s a premium. For example, if MSTR is $300 and the BTC per share is worth $220, that’s a ~36% premium. This metric fluctuates but has generally indicated a premium during bull markets. Book value per share is also largely a function of the carrying value of Bitcoin on the balance sheet (which was $64.4 billion at mid-2025 under new fair-value accounting) (^[3]) (^[3]). MSTR’s price-to-book can be misleading, though, because the book value will move with Bitcoin’s price.

Comparables: There are few true comparables to MicroStrategy, given its unique positioning. Some have likened it to a pseudo-Bitcoin ETF or trust. The Grayscale Bitcoin Trust (GBTC) is one such analogue: it directly holds Bitcoin and historically traded at premiums or discounts to its NAV. In MicroStrategy’s case, active corporate decisions (raising capital, choosing not to sell) add a management dimension absent in a passive trust. Other companies that followed MicroStrategy’s playbook (like GameStop, which started buying Bitcoin as a reserve asset (^[10])) are much smaller and often ended up trading below their crypto NAV when sentiment waned (^[4]). Crypto-mining firms (Marathon Digital, Riot Platforms, etc.) hold Bitcoin on their balance sheets too, but they also have operating businesses (mining) and typically trade near tangible book value of assets during downturns. In sum, MicroStrategy’s valuation is chiefly a bet on Bitcoin’s long-term price trajectory, amplified by the leverage and the aura of Saylor’s leadership. If Bitcoin continues to rise over the years, MicroStrategy’s stock could rise even more (as happened in 2020–2021 and again in early 2025, when MSTR stock outperformed Bitcoin’s percentage gains (^[1]) (^[2])). Conversely, if Bitcoin falters, MSTR shares could dramatically underperform – a risk we explore next.

Risks and Red Flags

Bitcoin Price Volatility: The most obvious risk is Bitcoin’s extreme volatility. MicroStrategy’s fortunes are tightly bound to the price of BTC – about half of the company’s value is directly tied to its Bitcoin holdings (^[6]), and the rest of the valuation is largely a speculative premium on those holdings. A sharp decline in Bitcoin can severely impair MicroStrategy’s equity and even threaten its solvency. For instance, the company’s average cost basis by late 2025 was around $70k–$73k per Bitcoin (^[6]) (^[3]). If BTC were to fall below that level, MicroStrategy would be sitting on an aggregate loss. Schiff emphasizes that with so much Bitcoin bought on borrowed funds, a downward price move “could quickly turn into a ‘death spiral’” of mounting losses and waning investor confidence (^[6]). We saw a glimpse of this in 2022–2023 when Bitcoin’s bear market forced MicroStrategy to take impairment charges (under old accounting rules) and contributed to a series of large net losses. Although fair-value accounting now allows reflecting gains when prices rise, it equally means losses will hit the income statement when prices fall (^[10]). A severe enough crash (say Bitcoin down >80%) could wipe out MicroStrategy’s equity cushion altogether, given the leverage. Saylor has acknowledged that an 80–90% drawdown is possible and claims the company could survive it (^[9]), but that would likely involve painful measures (e.g. suspending dividends, selling assets, or diluting shareholders further). Bottom line: owning MSTR is effectively a leveraged bet on Bitcoin’s price – investors must be prepared for extreme swings, including the risk of total loss if an extended crypto winter meets a heavy debt load.

Leverage and Financial Fragility: MicroStrategy’s use of leverage amplifies its risk profile. The company has billions in obligations (debt principal and preferred stock) that eventually must be paid or refinanced. While much of the debt is long-term, it increases the fixed claims on the company’s assets. If Bitcoin prices plummet and remain depressed when a large maturity comes due, refinancing could be difficult, and creditors may not be patient. Importantly, the preferred equity – despite being labeled equity – introduces debt-like stresses: those 8–10% dividend expectations create pressure similar to interest payments. If MicroStrategy cannot maintain those payouts, it could lose access to that capital market as Schiff warned (^[7]) (^[7]). The non-cumulative feature of the preferreds is a potential red flag: it was likely included to avoid building up arrears in a crisis, but it also means the company could stop paying without immediate default. Such a move, however, might be perceived as a de facto default by the market, tanking the stock and preferred prices. Another leverage-related concern is that MicroStrategy has continually diluted shareholders to reduce net debt stress – issuing new shares (through at-the-market programs and conversion of notes) boosted the outstanding count to 264+ million shares (^[3]), a massive increase from just ~14 million shares in 2020 (pre-Bitcoin strategy). While this dilution was generally done at higher stock prices (softening the blow to existing holders), it means any per-share metrics have deteriorated (e.g. book value per share, BTC per share initially dropped until they leveraged further to buy more BTC). Shareholders face the risk that further dilution could occur if MicroStrategy raises more equity capital in the future (Saylor has proven willing to issue shares aggressively when the stock is riding high (^[10])). In essence, the company’s capital structure is high-wire act – beneficial in a rising market but dangerous in a downturn.

Questionable Business Model and Governance: Another red flag is the novelty and opacity of MicroStrategy’s business model. This is not a typical operating company with organic cash flows; it’s more akin to an externally financed Bitcoin fund run at the discretion of one influential figure. Saylor’s unwavering “Bitcoin maximalist” stance – he famously said MicroStrategy will never sell its holdings and even borrowed to buy more – raises governance concerns. The board and management appear fully aligned with Saylor’s vision, but minority shareholders have little say in strategic direction (especially as Saylor controls a majority of voting power through class B shares). Some critics go so far as to call MicroStrategy a one-man show or a cult of personality around Saylor, which is a governance red flag. Jim Chanos’s critique that Saylor applies a dubious “multiplier” to the value of Bitcoin holdings and even to changes in that value (^[1]) suggests that management might be using unconventional or promotional metrics to justify the stock’s valuation. At an extreme, Schiff has labeled Saylor “the biggest con man on Wall Street” for the way he pitches MicroStrategy’s Bitcoin bet (^[9]) (^[9]). While that is a harsh personal accusation, it underlines the skepticism around whether MicroStrategy is a visionary strategy or just financial engineering gambling on crypto. Investors should carefully evaluate management’s claims and track record. (It’s worth noting that MicroStrategy and Saylor have a checkered history – in 2000 the company faced an accounting scandal and Saylor paid the SEC fines for financial misstatements, which is an historical governance blemish.) Today’s issues are different, but the transparency of MicroStrategy’s strategy is still a concern: for example, complex instruments like the “Series A Stretch” variable-rate preferred stock might be hard for investors to analyze, and the company’s financials are dominated by volatile marks rather than stable revenues.

Market Sentiment and Liquidity Risks: MicroStrategy’s fate is heavily tied to market sentiment – both towards Bitcoin and towards MicroStrategy itself as a proxy. As discussed, the stock has traded at a premium when enthusiasm is high, but that can flip to a discount if sentiment sours. The second half of 2025 illustrated this: once Bitcoin pulled back from ~$110k to ~$80k, MSTR shares fell by about 50% (^[4]), a larger drop than Bitcoin’s, indicating that the premium evaporated. If investors begin to view MicroStrategy as simply a levered BTC holder with added risk (as opposed to a unique visionary play), the stock could trade below the value of its coins. In that scenario, raising new equity becomes punitive (dilutive at low prices), and even issuing more preferred could be too expensive. There’s also liquidity risk in the sense of trading liquidity: MSTR’s float has increased with new issuance, but it’s still a relatively volatile stock that could see outsized moves or even potential short squeezes if sentiment flips rapidly (as seen in prior crypto rallies). Finally, regulatory or accounting changes remain an overhang. While the new FASB accounting rule allowing fair value treatment of crypto has helped clarify financials (^[10]), regulators could in theory crack down on public companies holding excessive crypto (for instance, via securities laws or capital requirements) or tax authorities could change tax treatment. There’s no immediate sign of such action, but the unique nature of MicroStrategy’s strategy means it constantly ventures into uncharted territory (even the SEC questioned MicroStrategy’s non-GAAP reporting of Bitcoin-based figures in the past).

In sum, MicroStrategy carries elevated risks on multiple fronts: asset risk (Bitcoin volatility), financial risk (leverage and ability to refinance), and execution risk (management’s unorthodox strategy and potential missteps). Shareholders are essentially betting that Saylor’s big gamble will continue to pay off. If it does not, the downside could be severe – as Schiff bluntly puts it, regardless of Bitcoin’s long-term fate, MicroStrategy could end up insolvent if its financing strategy collapses (^[5]).

Open Questions and Outlook

Looking ahead, several key questions remain about MicroStrategy’s trajectory and the viability of Saylor’s Bitcoin-focused model:

– Is the Strategy Sustainable in the Long Run? Can MicroStrategy continue to hodl Bitcoin indefinitely and keep raising capital as needed, or is there an inevitable breaking point? The company has so far navigated crypto boom-and-bust cycles, but skeptics argue the “beginning of the end” may be near if it must issue stock just to pay its bills (^[9]). Will MicroStrategy ever need to liquidate some of its Bitcoin (breaking Saylor’s vow never to sell), or can it truly maintain a forever BTC treasury through all market conditions?

– What Happens If Bitcoin ETFs Dominate? With mainstream Bitcoin investment products now available (e.g. BlackRock’s ETF attracting huge inflows (^[9])), will investors still find MicroStrategy attractive? The stock’s premium suggests some perceived added value, but if one can buy Bitcoin directly or via a low-fee ETF, MSTR’s role as a proxy could diminish. It’s an open question whether MicroStrategy will pivot (or be pressured) to become more like an active Bitcoin fund or whether it gets marginalized by more efficient vehicles.

– How Will the New High-Yield Investors Behave? MicroStrategy’s shareholder base now includes income-oriented preferred stockholders who expect steady dividends. This is a new dynamic for a company that previously courted purely equity growth investors. If crypto volatility causes a dividend hiccup, will these investors flee en masse, as Schiff predicts, or will they ride it out? The tolerance of these yield investors for Bitcoin-related turbulence will be tested in any downturn, and that response will influence MicroStrategy’s financing options (a critical unknown).

– Can the Legacy Business Add Value? MicroStrategy’s enterprise software business still exists, generating on the order of a few hundred million dollars in annual revenue. While it’s currently overshadowed by the Bitcoin strategy, what is its fate? Will Saylor (or CEO Phong Le) find a way to grow or monetize the software unit (which could provide real cash flow to support the company)? Or will it continue to be a side note, with perhaps even a possibility of selling that segment to focus 100% on Bitcoin? Any improvement or deterioration in the operating business could slightly alter the risk profile by contributing (or consuming) cash – something to watch.

– What Is the Endgame for Shareholders? Perhaps the biggest question: how do investors ultimately realize value from MicroStrategy’s Bitcoin holdings? The company has been clear it intends to accumulate, not divest. That implies no distribution of Bitcoin or sale is planned even if prices skyrocket. Will MicroStrategy eventually start paying dividends to common shareholders if it becomes vastly profitable on paper, or will it keep all value on the balance sheet? Alternatively, could MicroStrategy at some point spin off its Bitcoin holdings or convert into a more fund-like structure? So far, Saylor’s stance is to simply keep buying and holding BTC. Investors must consider whether they are comfortable with an indefinite hold strategy, or if they expect some form of monetization event (such as an acquisition, liquidation, or inclusion in a broader ETF) in the future.

MicroStrategy remains one of the market’s most fascinating and controversial stories – effectively a high-beta Bitcoin surrogate wrapped in a corporate shell. Bulls believe Saylor’s conviction will be rewarded if Bitcoin continues its ascent, delivering outsized equity returns. Bears like Schiff counter that the entire setup is a “complete fraud” destined to unravel under financial realities (^[6]) (^[5]). The coming years – with Bitcoin’s performance, interest rates, and investor sentiment all in flux – should provide answers as to which narrative prevails. Investors in MSTR would be wise to monitor those open questions closely, as the margin for error is as thin as ever (^[6]).

Throughout it all, one thing is clear: MicroStrategy is no ordinary company, and its stock is not a casual investment. It represents a grand experiment at the intersection of corporate finance and cryptocurrency – one that will either cement Michael Saylor’s legacy as a visionary, or serve as a cautionary tale of speculative excess in the annals of market history.

Sources: The analysis above is grounded in information from SEC filings, MicroStrategy’s investor disclosures, and reputable financial media. Key sources include MicroStrategy’s 2025 quarterly reports (detailing its Bitcoin holdings and capital structure) (^[3]) (^[3]), Reuters news and commentary on the company’s financial results and strategy (^[2]) (^[4]), and statements/criticisms from market observers such as Jim Chanos and Peter Schiff (^[1]) (^[9]). These references provide a factual basis for evaluating MSTR’s dividend policy, leverage, valuation, and risks in the context of its Bitcoin-focused business model.

Sources

1. https://reuters.com/business/short-seller-chanos-questions-bitcoin-holding-pioneer-strategys-valuation-2025-06-12/
2. https://reuters.com/business/saylors-strategy-swings-quarterly-profit-treasury-strategy-gains-momentum-2025-07-31/
3. https://sec.gov/Archives/edgar/data/1050446/000095017025102209/mstr-20250630.htm
4. https://reuters.com/commentary/breakingviews/crypto-hoarders-veer-farce-tragedy-2025-12-01/
5. https://cryptonews.com/news/peter-schiff-calls-saylors-bitcoin-only-strategy-fraud-demands-live-debate/
6. https://u.today/schiff-sounds-complete-fraud-alarm-for-saylors-62-billion-bitcoin-strategy
7. https://webull.com/news/13879505134380032
8. https://moneyweek.com/investments/bitcoin-crypto/beware-the-bubble-in-bitcoin-treasury-companies
9. https://crypto.news/schiff-saylor-bitcoin-strategy-business-model-fraud/
10. https://reuters.com/business/saylors-strategy-reports-fifth-consecutive-quarterly-loss-announces-21-billion-2025-05-01/

For informational purposes only; not investment advice.