The plunge in the stock market of Strategy, Inc. (MSTR), which holds the largest Bitcoin (BTC) reserves in the company’s treasury, caused controversy in the market and prompted sharp criticism from Peter Schiff, an economist and investor known as a Bitcoin critic.
Schiff attacked the company, declaring that “[Strategy’s]stock is bankrupt and its business model is fraudulent.”
These criticisms come as a result of Strategy’s creation of a new $1.44 billion reserve fund. The fund is intended to ensure dividend and interest payments over the next 12 to 21 months and will be financed through the sale of MSTR shares. without the company liquidating some or all of its BCT reserves. It reaches 650,000BTC.
The investor interpreted the move as “the beginning of the end for MSTR” and questioned the viability of the company’s business model, with Strategy president Michael Saylor saying he was “forced to sell shares not to buy Bitcoin, but simply to buy US dollars to fund MSTR’s interest and dividend obligations.”
strategy We’ve seen a 25% decrease in the past month and a 50% decrease in the past 6 monthsthe company’s stock is trading around $180, the lowest it has been since October 2024. This decline affected the company’s net asset value multiple (mNAV), a metric that compares the company’s market capitalization to its total Bitcoin reserves.
Strategy recovers important indicators
According to a report by CriptoNoticias, mNAV reached 0.84 in November last year, suggesting that the market values the company below the value of its BTC holdings. However, this indicator shows a recovery at 1.03. It is pertinent to recall that Strategy’s mNAV falling below 1 in November happened without the company selling any Bitcoin. On the contrary, he continued to buy more This fact reinforces the perception that the company’s solvency and immediate liquidity needs do not exist..
The volatility in Strategy’s stock price is related to the historical decline in the price of Bitcoin, which has fallen 32% from its all-time high of $126,000 in early October last year.
Despite the concerns, analysts like David Battaglia, who has a bullish outlook on MSTR and Bitcoin, have expressed optimism, suggesting that rising Bitcoin prices will force arbitrage funds to take losses on hedges and buy MSTR en masse. Mr. Battaglia concluded that Mr. Thaler had set up a “programmed bullish time bomb” for the company.
