Michael Saylor‘s Strategy Inc. (NASDAQ:MSTR) reports first-quarter earnings after the bell Tuesday, with attention shifting from Bitcoin (CRYPTO: BTC) accumulation to the company’s $8.5 billion preferred-stock funding engine.
The Stretch instrument, listed as STRC, has become the primary capital rail behind Strategy’s Bitcoin purchases and the most contested feature of its balance sheet heading into the call.
The Stretch Debate
Economist Peter Schiff has spent the run-up to earnings hammering the structure, calling Stretch (NASDAQ:STRC) “the most obvious Ponzi that has ever existed.”
The Financial Times’ Alphaville column raised similar concerns, warning of Strategy’s “teetering financial tower” and comparing the preferred-stock funding loop to pre-2008 mortgage securitization dynamics.
Strategy carries roughly $1.5 billion in annual STRC dividend obligations on the 11.5% yield, with …
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