Strategy's 'Entire Business Model Is A Fraud': Gold Bug Peter Schiff Challenges Michael Saylor To A Debate

Core Viewpoint - Economist Peter Schiff has alleged that Bitcoin treasury company Strategy (NASDAQ:MSTR) operates a fraudulent business model and predicts its eventual bankruptcy regardless of Bitcoin's performance [1][2]. Group 1: Business Model and Capital Raising - Strategy has built its business around issuing equity to accumulate Bitcoin, aiming to maximize Bitcoin per share for shareholders and serve as a proxy for investors who cannot directly invest in the digital asset [3]. - Recently, Strategy has increasingly relied on preferred shares for capital raises instead of common stock due to a significant contraction in its premium to net asset value, which has dropped from over 2.5 to less than 1 in the past year [4]. - The company faces challenges in issuing equity to fund new Bitcoin purchases without diluting existing shareholders [4]. Group 2: Market Conditions and Financial Obligations - The rise of copycat companies has intensified competition, with 194 companies now holding Bitcoin on their balance sheets [5]. - Strategy has also been pressured by a decline in Bitcoin's market price, which fell from a record high of $126,000 to as low as $89,000 [5]. - The company has nearly $700 million in annual dividend obligations as of Q3, raising concerns about its ability to pay dividends, as these would need to be funded by capital raised from new investors [6].