Michael Saylor marked Strategy's turnaround from its 2022 lows, stating the firm's Bitcoin and cash reserves now exceed its debt by roughly $48 billion. In October 2022, MicroStrategy (now Strategy) held 130,000 BTC, and its debt briefly surpassed reserves by $300 million during the FTX collapse. Since then, the company raised over $60 billion and accumulated 843,700 BTC, the largest public corporate holding. Saylor credited conviction and long-term thinking for the rebound. However, the firm's preferred stock STRC, designed to trade near $100, recently fell into the high $80s, stalling its Bitcoin-buying mechanism. The $10 billion STRC issuance is not Bitcoin-collateralized and carries only a preferred claim on residual assets. Analysts argue the sell-off reflects miscommunication rather than structural flaws, noting that retail holders own about 80% of STRC. The company plans to switch to semi-monthly STRC dividends by end of June, adding to market uncertainty. Critics like Peter Schiff call the structure a house of cards, while supporters expect STRC to recover if Bitcoin stays above $10,000.

Key facts

• Strategy's BTC and cash reserves exceed debt by ~$48 billion, a reversal from $300M deficit in 2022.
• STRC preferred stock trades near $88, below its $100 target, hampering new issuance at par.
• STRC is not collateralized by Bitcoin, it is a credit product with preferred claim on residual assets.
• About 80% of STRC holders are retail, leading to panic selling amid price decline.
• Semi-monthly STRC dividend payments take effect end of June, adding pressure.

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