Prominent gold advocate and cryptocurrency critic Peter Schiff took to X on Wednesday to issue a stark warning about STRC, the preferred stock issued by Strategy (formerly MicroStrategy). Schiff claimed that most STRC investors could end up losing the bulk of their capital. The trigger, he argued, would be Strategy's Executive Chairman Michael Saylor being forced to cancel dividend payments on the preferred shares, a move that would cause the STRC price to collapse.
Schiff further predicted that a wave of lawsuits would then hit Strategy (ticker MSTR), compounding its problems. Investors who suffered losses after being misled by promotional materials would likely pursue legal compensation. STRC, as a dividend-yielding preferred stock, derives much of its value from the continuity of those payouts, making a suspension particularly devastating.
The warning adds to existing concerns about Strategy’s financial model, which involves heavy Bitcoin purchases funded by debt and equity offerings. While Schiff is known for his long-standing skepticism of cryptocurrency, his critique touches on the viability of dividend promises in a highly leveraged, volatile environment. Strategy has not yet responded to the remarks.