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MicroStrategy isn’t buying Bitcoin the same way anymore. The company has quietly pivoted away from issuing preferred shares and is now leaning almost entirely on common stock sales to keep stacking sats.
Why It Matters
This shift away from preferred shares to common stock sales underscores MicroStrategy's evolving strategy in capitalizing on its equity to fund Bitcoin acquisitions amidst fluctuating market conditions. By relying more on common stock, the company may be seeking to enhance shareholder engagement and liquidity, while also signaling confidence in its long-term commitment to Bitcoin as a core corporate asset. This change could influence investor sentiment and the overall market dynamics surrounding both MicroStrategy's stock and the broader cryptocurrency investment landscape.
The shift is pretty significant. For much of the year, MicroStrategy’s Stretch preferred stock — ticker STRC — was a key funding tool. In May alone, the company raised roughly $1.95 billion by selling STRC shares. That’s a big number. But since that raise, no new STRC shares have hit the market. The channel, for now, seems closed.
Peter Schiff noticed.
Schiff’s Take on the STRC Problem
Schiff, long one of Bitcoin’s loudest critics, laid out his read on his podcast. He pointed out that STRC currently trades around $99.4 — close to its $100 par value — which is actually a recovery. Earlier in the year the stock fell to roughly $75. He credits weekly buybacks and a Bitcoin price rally for pulling it back up, though he’s not exactly celebrating.
His argument is blunt: Michael Saylor can’t use STRC to fund more Bitcoin anymore. The stock trading near par means new share issuances would essentially be a wash — there’s no real premium to exploit. Schiff says MicroStrategy probably has enough reserves to keep paying STRC dividends for a while, but without fresh issuances, that funding engine has stalled.
Saylor, for his part, has pointed to STRC’s reduced volatility as a win for income investors. He’s noted that STRC now carries a 30-day historical volatility of 9%, which is actually lower than the SPDR S&P 500 ETF’s 10%. Stable, yes. But stability doesn’t fund Bitcoin buys.
How the Recent Bitcoin Purchases Got Paid For
So where’s the money coming from? Common stock. Recent filings show MicroStrategy sold class A common stock to buy 4,603 BTC in late August and another 1,665 BTC in late September. On top of that, the company pulled $75.7 million from cash reserves to pick up 950 BTC.
That’s not nothing. But it’s a different playbook. Selling common stock dilutes existing shareholders, and it’s a slower, less dramatic mechanism than a big preferred share raise. The May STRC deal was fast and large. The current approach is more incremental.
There was also a notable gap. MicroStrategy paused Bitcoin purchases for roughly ten weeks over the summer. During that stretch, the company was selling some Bitcoin to fund dividend payments and buybacks rather than accumulating more. That kind of reversal — selling the asset you’ve built your whole brand around — doesn’t go unnoticed on crypto Twitter or Wall Street.
The renewed buying in late August, funded through common stock, looks like a deliberate restart. But the mechanics are different now.
The Reserve and What Comes Next
As of September 27, MicroStrategy reported holding a $5.02 billion USD Reserve. That’s the cushion set aside to cover preferred dividends and interest payments. It’s a meaningful number, and it buys the company flexibility. But Schiff’s concern is that without new STRC issuances, the company is burning through that buffer rather than replenishing it.
He’s also flagged a macro risk. If tech stocks slide, Bitcoin probably follows — and that would put pressure on MicroStrategy’s whole structure. The company’s Bitcoin holdings are the collateral underpinning a lot of its financial engineering. A sharp drop in BTC prices isn’t just a paper loss; it’s a stress test for the entire strategy.
Unclear yet whether Saylor sees it that way. He hasn’t publicly addressed the STRC funding constraint directly.
What’s coming is a new filing. That document will show whether common stock sales keep carrying the weight, whether STRC issuances resume, or whether something else entirely enters the picture. The numbers will be there in black and white.
MicroStrategy’s next move matters beyond just its own balance sheet. The company has become a kind of proxy for institutional Bitcoin conviction — a bellwether that other corporates and fund managers watch closely. When it buys, people notice. When it pauses, people notice more.
The $5.02 billion reserve and the 9% STRC volatility figure are the two data points Saylor wants you to focus on. Schiff wants you focused on the May issuance that hasn’t been repeated since.
Frequently Asked Questions
How is MicroStrategy currently funding its Bitcoin purchases?
MicroStrategy is using proceeds from selling class A common stock, after its STRC preferred share issuances stalled following a roughly $1.95 billion raise in May.
What is Peter Schiff’s criticism of MicroStrategy’s STRC strategy?
Schiff argues that with STRC trading near its $100 par value, MicroStrategy can no longer issue new preferred shares at a meaningful premium to fund Bitcoin acquisitions, effectively closing that funding channel.
