MicroStrategy’s use of STRC preferred stock to fund Bitcoin purchases is drawing scrutiny, according to an October 14 report from K33. The financing model helped the company accumulate more Bitcoin in the first half of the year, but created $725 million in annual dividend obligations.
K33 questioned the model’s overall cost-efficiency and said at-the-market (ATM) stock issuance was a more effective way to buy Bitcoin.
MicroStrategy recently repurchased $192.4 million of STRC preferred shares as it continued to manage its capital structure. On the same day, Chairman Michael Saylor told Bloomberg that the crypto bear market had ended and predicted Bitcoin would surpass $100,000. The company also announced a new dedicated YouTube channel for its Bitcoin-related content. Reports noted no significant market reaction in STRC shares.