Peter Schiff Says MicroStrategy Lost Its Bitcoin-Buying Power

Peter Schiff says MicroStrategy has pulled its Stretch (STRC) preferred stock back toward its $100 par value. However, he argues the company has lost the issuance channel that funded its Bitcoin purchases.

Even so, Strategy has kept adding Bitcoin, funding its latest purchase with proceeds from common stock sales.

Schiff Credits Buybacks and a Bitcoin Rebound for STRC's Recovery

Schiff, a longtime Bitcoin critic, made the case on his October 2 podcast. He said STRC trades near $99.4, a recovery he admitted surprised him.

He credited Strategy's weekly STRC buybacks and Bitcoin's rally for the move. Schiff said that rally may have restored some confidence in the stock or triggered short covering.

The preferred stock had sunk to about $75 earlier this year, which CEO Phong Le blamed on unexpected leverage.

Referring to Executive Chairman Michael Saylor, Schiff argued that the rebound has not reopened Strategy's key funding route.

"There's no way that he's going to be able to start selling more Stretch; that means he's not going to be able to raise money to really start buying more Bitcoin," Schiff said.

He added that Strategy has raised enough cash to keep paying STRC dividends a little longer before it runs out. However, he said the company no longer has the machinery to buy more Bitcoin.