Economist Peter Schiff argued that MicroStrategy’s Stretch Preferred Stock (STRC), which is structured to trade at $100 and currently yields 11.5%, creates a recursive financing setup: STRC proceeds are used to buy Bitcoin, but Bitcoin generates no cash flow to fund the hefty dividends. Schiff says MicroStrategy would need to attract new investors, draw down roughly $2.25B in cash reserves, or sell Bitcoin (or default on dividends) — actions that could pressure MSTR and BTC.

Facts cited: STRC structured to trade at $100 and yields 11.5%; STRC proceeds are used to buy Bitcoin, which produces no cash flow; company cash reserves are ~ $2.25B. Schiff concludes the choices are attract new investors, deplete cash, or sell Bitcoin/default — implying downside risk to MSTR/BTC.