Jiang Zhuoer, founder of the LakeBTC mining pool, posted on social media to share his views on the latest developments of MicroStrategy (MSTR) and its preferred stock STRC. He pointed out that STRC has experienced a significant de-peg, falling to as low as 73, reflecting growing panic among US stock market funds about Bitcoin.
Preferred Stock De-peg and Market Fear
Jiang noted that the price of MicroStrategy's preferred stock STRC has deviated substantially from its theoretical value, hitting a low of 73. He believes this is a direct manifestation of US equity investors' panic over Bitcoin's outlook. As a preferred stock, STRC's price fluctuation is closely tied to MicroStrategy's overall operating condition and the price of Bitcoin.
Shift in MSTR's BTC Purchase Behavior
Jiang detailed MSTR's financing and BTC purchase pattern over the past three weeks. The company raised capital by issuing additional common shares for three consecutive weeks. In the first two weeks, MSTR used half of the proceeds to purchase Bitcoin, accumulating 1,500 BTC. However, in the third week, the situation changed markedly: the number of shares sold doubled, but BTC purchases dropped to only 520 BTC. More importantly, MSTR retained most of the funds to pay STRC dividends instead of continuing large-scale BTC purchases. Jiang believes this is a clear signal that the company holds a pessimistic view on the subsequent market.
Future Expectations and Risk Analysis
Based on this behavior, Jiang expects MSTR's BTC purchases to decline significantly in the coming months, and it may even stop buying Bitcoin altogether, instead redirecting funds to pay STRC dividends. He emphasized that STRC is preferred stock, not debt, so the company is only obligated to pay dividends and does not need to repay principal. Currently, MSTR's debt ratio is only about 10%, indicating very low financial leverage. Unless a Bitcoin bear market lasts for ten years, there is no risk of a “blow-up” for MSTR. This analysis provides investors with an important reference regarding MicroStrategy's financial safety.