The stock hit a record low of $82.53 on Thursday, sparking intense scrutiny regarding Strategy’s capital structure and dividend obligations. Schiff alleges that if buyers were lured by yield-focused marketing without sufficient warning of potential losses, they may hold an “ironclad” case against the company. While he suggested Saylor could be in violation of securities marketing rules, no regulatory enforcement actions have been initiated to date.
In section Cryptocurrency
Peter Schiff claims Michael Saylor misled STRC investors
Retirees and income-focused investors who bought Strategy’s STRC preferred stock may have grounds for legal action, according to Peter Schiff. The prominent Bitcoin critic argues that Michael Saylor failed to properly disclose the high risks associated with the security, which has plummeted 15% below its $100 par value.
Financial concerns are mounting as market maker QCP estimates that Strategy’s current liquidity may only sustain dividend payments for roughly seven and a half months. The company recently repurchased $1.5 billion in convertible notes while simultaneously raising $200 million via share sales to fund further Bitcoin acquisitions. This aggressive accumulation strategy faces renewed skepticism; Schiff contends that recent purchases result in a “negative Bitcoin yield” for shareholders, as the equity issued to fund the buys dilutes value on a per-share basis. Adding to the pressure, SEC filings reveal that director Jarrod Patten has offloaded nearly $9 million in company stock over the last three months. Strategy and Michael Saylor have yet to issue a formal response to these allegations.
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