In this article, we'll examine the situation of Michael Saylor and his company, Strategy. Remember that Saylor's model is based on issuing debt/equity and raising capital to accumulate Bitcoin (there's certainly a "Ponzinomics" component, but calling it a Ponzi scheme is wrong. BTC is behind this system, although funds from other investors are needed to fuel the "machine" and purchase more $BTC). When the bonds mature, he must repay the debt, otherwise he will default (bankruptcy). There is no liquidation if the price of $BTC drops, nor if he fails to pay dividends in $STRC; the company would go bankrupt if it fails to repay the debt at the various due dates. One novelty (not appreciated by the market) was the sale of 32 $BTC for the first time (although a few days later he bought another thousand). I believe that with this symbolic sale, Saylor simply tried to "accustom" the market to potential sell-offs (depending on Strategy's overall situation).
In the table below, you can read:
- BTC Reserve (accumulated BTC).
- USD Reserve (cash, used to pay dividends and part of the debt).
- Debt (of the company, not $STRC dividends).
- USD Months of Dividend Coverage (at the current situation, if it no longer collects cash, this represents the months remaining to pay dividends in STRC. This metric is becoming more and more apparent over time. If it approaches 0, it would have to sell a portion of BTC to pay the dividends, otherwise this would undermine confidence in the company and STRC investors).
- BTC Years of Dividend Coverage.
Essentially, compared to a few months ago, accumulated BTC has increased, debt and costs/expenses have increased, and the cash reserve has decreased, along with the months remaining (if it no longer collects $1) to pay dividends to $STRC investors. Despite the mouth-watering 11% annual dividend payout, the market is pricing in precisely the negative factors mentioned above (which is why the market is still selling $STRC, even at $100). Strategy could increase its annual dividend yield (to re-attract liquidity and bring $STRC back to par).
Saylor will have to pay approximately $1 billion on September 16, 2027, or the company will go bankrupt. On that date, if $MSTR is above the "conversion price" ($183), it will pay in stock, otherwise in cash.
Strategy's situation has worsened compared to a few months ago, but it's not the end. It's not a death spiral. This situation has arisen partly due to increased mistrust in the financial markets, which has sunk nearly all financial sectors (except for AI and tech stocks).
Article always updated with all the possibilities of on-chain farming (airdrop): Some Sites To Earn Crypto Bonus (Old & New)
