Peter Schiff warns that Michael Saylor’s Strategy (formerly MicroStrategy) could face bankruptcy as MSTR stock drops sharply.
A well-known economist, Peter Schiff, is worried that Michael Saylor’s Strategy, which used to be called MicroStrategy, might go bankrupt.
His warning came after a sharp drop in the price of MSTR stock, which fell 5.74 percent on Monday and another 4.7% in pre-market trading on Tuesday. Even though the company had a big run-up in 2024, it has been under a lot of selling pressure and is now down 6% for the year.
Peter Schiff says that Strategy’s Bitcoin Strategy will have problems.
Economist and Bitcoin critic Peter Schiff has said what he thinks about Strategy’s focus on Bitcoin. He says that problems will arise if MSTR stock starts trading below the value of its Bitcoin reserves.
He said the company could sell Bitcoin and buy back shares with the money to make up the difference. Schiff, on the other hand, says that this could cause Bitcoin’s price to drop sharply, which would lower the value of MicroStrategy’s stock.
Strategy (MSTR) added 499,096 Bitcoin to its holdings with a new $1.99 billion purchase, which is when Schiff spoke. This purchase was paid for with money from an offering of $2 billion in convertible notes. Until February 27, there is a chance to add another $300 million.
The price of MSTR stock is going down quickly.
Strategy (MSTR) has been going through a big drop. Its price has dropped 48% since its all-time high on November 21, taking out about $70 billion in market value. Analysts are warning people to be careful because MSTR is breaking down in a falling triangle, which means the price is going down.
The stock is almost ready to test the 200-day Simple Moving Average (SMA) for the first time since September. This is a key support level that could determine its short-term path amid market pressures in general.
