Peter Schiff Questions Michael Saylor-Led Strategy's Leverage Bitcoin Play Amid MSTR Decline: 'Massive Dilution Has Destroyed Shareholder Value'

Influential economist and market commentator Peter Schiff criticized Strategy Inc.’s (NASDAQ:MSTR) debt-fueled Bitcoin (CRYPTO: BTC) purchases on Monday, pointing out the decline in the firm’s share price and the narrowing Net Asset Value premium.

What Happened: Schiff stated on X that despite the company’s co-founder Michael Saylor talking about his leveraged Bitcoin buys generating a yield of 6.9% this year, the stock value has dropped by 6%.

Schiff stated that the “massive dilution” has destroyed shareholder value, causing the premium to its Bitcoin holdings to collapse by 85%.

The NAV premium measures the firm's market value to its Bitcoin holdings value. According to the MSTR tracker, the premium was 1.604 as of this writing, or 60%, down from 2.148, or 148%, on Jan. 19.

Typically, a high premium reflects the market’s trust in the company’s Bitcoin investment strategy.

See Also: Kanye West Deletes X Posts On Potential Meme Coin, Unfollows Changpeng Zhao — What’s He Upto?

Why It Matters: Strategy’s Bitcoin play has been under scrutiny, with some, like Schiff, questioning its effectiveness.

Last week, he warned that if the company's shares continue to trade at a discount to its Bitcoin holdings, it could lead to a negative Bitcoin yield.

Strategy has spearheaded Bitcoin’s corporate adoption, accumulating a stockpile of 478,740 BTC, worth over $44 billion, according to bitcointreasuries.net. The company announced its latest acquisition of 20,356 BTC for approximately $1.99 billion on Monday.

Price Action: At the time of writing, Bitcoin was exchanging hands at $92,098.54, down 4.18% in the last 24 hours, according to data from Benzinga Pro.

Shares of MicroStrategy were down 2.21% in after-hours trading, after closing 5.65% lower at $282.76 during Monday’s trading session.

Image via Shutterstock

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