NEWSLETTER
Michael Saylor's last movement to finance more purchases of bitcoin has revived the debate on the viability of his high -risk approach. The company now called the strategy (previously Microstrategy) announced that it would issue a new perpetual preferred action, Strf (“Strife”), with an annual dividend of 10%. While some see this as an inventive way of accumulating more btc, others warn that cash dividends obligations could become unsustainable if bitcoin prices collapse.
Could Saylor be the next Catalizer of the bitcoin Bear market?
In x, the strategy announced the creation of Strf (Strife), which described as a “new offer of perpetual preferred shares, available for institutional investors and selected non -institutional investors.” In its statement, the company explained that the income would be used for general corporate purposes, including working capital, “and the acquisition of bitcoin“, although it emphasized that this remained “subject to the market and other conditions.”
According to the strategy, Strf has 10% annual cumulative dividends, with the first cash dividend scheduled for June 30, 2025 and then each quarter from then on. The observers quickly noticed how such a high payment could tighten the company's resources, since their general balance is strongly inclined towards bitcoin instead of traditional sources of income.
Among the first critics was Whalepanda (@Whalepanda), coanfrerion of the Magic Canal of YouTube Friends with Riccardo Spagni, Samson Mow and Charlie Lee. He <a target="_blank" href="https://x.com/WhalePanda/status/1901986236853526894″ target=”_blank” rel=”noopener nofollow”>argued The 10%dividend, which could amount to $ 50 million in annual payments if the strategy collects $ 500 million, is too large given the company's structure:
“I have said it before Saylor will bring the next bitcoin Bear market. This seems desperate. 10% dividend at $ 500 million translates at $ 50 million annually, payable only in cash … they don't have that cash.”
Another vocal critic, Simon Dixon, a former investment banker turned into bitcoin investor known for backup platforms such as Kraken, Bitfinex and Bitstamp—<a target="_blank" href="https://x.com/SimonDixonTwitt/status/1901980416535417194″ target=”_blank” rel=”noopener nofollow”>drawing A strong parallel between the bold movement of the strategy and the notorious collapse of long -term capital management (LTCM) at the end of the 1990s. Although it did not equate the two scenarios directly, Dixon argued that offering a fixed dividend so high of “insufficient dollar income” resembled a “next level risk.”
He warned: “The announcement of the strategy of a 10% perpetual dividends paid in dollars, although it lacks sufficient income in dollars and operations with a general balance based on bitcoin, is a next level risk. This is beginning to resemble long -term capital management, which requires a rescue. If this ship apologizes, the nationalization could become a strategic movement for the United States. For clarification.
Not everyone shares the serious perspective. Some industry figures insist that Saylor's history in btc reserves of the growth strategy, and the relative simplicity of its balance compared to LTCM, offers a substantial mattress. David Bailey, CEO of btc INC, argued that Saylor's personal commitment to bitcoin should not be discounted: “Saylor literally has more skin in the game than anyone … if you don't like action, do not buy it, simple.”
He referred to critics as “unpleasant”, underlining how Public Defense and corporate purchases of Saylor have brought the main attention, and considerable tickets, bitcoin. bitcoin Dylan Leclair analyst also ruled out the LTCM comparison, describing it as “literally nothing like LTCM” and implying that the balance sheet backed by btc of the strategy does not represent the same systemic risk as a very leveraged coverage background that deals with derivatives.
Preston Pysh, co -founder of the Inverter's Podcasts Network, <a target="_blank" href="https://x.com/PrestonPysh/status/1902081550881096117″ target=”_blank” rel=”noopener nofollow”>offered A more nuanced shot. Although he expressed reservations about the new broadcast, he considers why the strategy did not use “the previous preferred emission that has an 8% dividend yield and the optional for common or cash payments,” he saw direct parallel to LTCM as “more laughible.”
PYSH floated rough numbers that suggest that even if bitcoin weakened 70% of its current levels, the strategy could theoretically maintain dividends and coupons payments for more than a decade. He wrote:
“If the price of bitcoin dropped 70% from here, it still has 12 billion dollars in bitcoin in the balance sheet and 115m in annual cash payments (combined dividends and coupons) that must be paid. That is approximately 12 years of payment inventory in the balance Balance.
At the time of publication, btc quoted at $ 83,454.
Outstanding image created with Dall.E, Record of TrainingView.com
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