nvestors are marking down Michael Saylor’s bitcoin strategy even as the company adds to its reserves and raises payouts. Strategy now trades below the value of its bitcoin stack, while critics question whether its high-cost funding model can hold. Strategy Builds $1.44B USD Reserve as Bitcoin Stockpile Hits 650,000 BTC Strategy Inc. said it has created a $1.44 billion US dollar reserve and lifted its bitcoin holdings to 650,000 BTC after a new purchase of 130 coins. The company disclosed that it bought the latest batch for about $11.7 million at an average price of roughly $89,960 per bitcoin, bringing its total bitcoin investment to $48.38 billion at an average cost of $74,436 per BTC. The firm explained that the US dollar reserve will support dividend payments on its preferred stock and interest on its outstanding debt. Strategy funded the reserve with proceeds from sales of Class A common shares through its at-the-market offering program. Management said its current intention is to keep enough cash on hand to cover at least 12 months of these obligations and to build the buffer toward 24 months or more, depending on market conditions and liquidity needs. According to the company, the dollar reserve now complements Strategy’s bitcoin reserve, which represents about 3.1% of the eventual 21 million BTC supply. Executives said the structure is meant to give the firm flexibility to meet fixed payments without selling bitcoin, while they continue to treat BTC as a long-term treasury asset. Strategy noted that the size and terms of the reserve remain at its sole discretion and may change as funding costs, bitcoin prices and capital-market windows shift. Schiff Slams Saylor After STRC Dividend Jumps to 10.75% Michael Saylor said in a post on X that Strategy’s STRC preferred stock now carries a 10.75% rate after “another rate hike last night.” The increase follows recent changes to Strategy’s capital structure. Soon after, long-time bitcoin critic Peter Schiff attacked both the move and Strategy’s business model. He wrote that this marks “the beginning of the end” for MSTR and argued that Saylor sold stock not to buy more bitcoin but to raise U.S. dollars to meet interest and dividend obligations. Schiff said the stock is “broken” and called the business model a fraud, while accusing Saylor of misleading investors. In a follow-up post, Schiff said Strategy now sells equity to raise cash and then uses that money to buy U.S. Treasuries yielding about 4%, while paying between 8% and 10% on its own debt and preferred stock. He questioned how long investors will view this as a viable strategy rather than a leveraged way to speculate on bitcoin. MicroStrategy Trades at Steep Discount to Its Bitcoin Stack MicroStrategy shares fell about 12% on the day and are now down 57% since Oct. 6, pushing the company’s market capitalization to roughly $45 billion. At the same time, the firm holds 650,000 bitcoin valued at about $55 billion, according to The Kobeissi Letter, which noted that the stock now trades around $10 billion below the headline value of its bitcoin reserves. MicroStrategy Bitcoin Valuation Gap. Source: The Kobeissi Letter Even after subtracting MicroStrategy’s reported $8.2 billion debt load, the firm’s net bitcoin position stands near $46.8 billion. That figure still sits about $1.8 billion above the company’s market cap and does not include any cash on its balance sheet. The Kobeissi Letter framed the gap as a sign of how sharply investors have repriced the stock and asked whether executive chairman Michael Saylor can continue adding to the firm’s bitcoin holdings under these conditions.
