TL;DR:
- Financial loss: MicroStrategy reported a net loss of $12.54 billion at the close of the first quarter of 2026, influenced by a valuation adjustment of $14.46 billion in its digital assets.
- Capital structure: The company has long-term debt of $8.2 billion and preferred equity that rose to $9 billion in the same period.
- Dividend commitment: The STRC preferred stock series maintains an annual yield of 11.5%, with a proposal to make bi-weekly payments starting in July 2026.
Gold advocate Peter Schiff has intensified his criticism against MicroStrategy, calling its business model and its STRC preferred stock a pure Ponzi scheme that could face an imminent collapse.
Yesterday @Saylor admitted that $MSTR would sell Bitcoin if needed to pay the dividend on $STRC. I think that type of "commitment" is needed to keep the Ponzi going longer. But my guess is when the time comes, he’d suspend the dividend and crash $STRC rather than crash Bitcoin.
— Peter Schiff (@PeterSchiff) May 6, 2026
Financial Facts and Schiff’s Thesis
According to the first quarter 2026 financial statements, MicroStrategy recorded an operating loss of $14.5 billion. The company’s official report attributes these results primarily to the drop in market value of its Bitcoin holdings during said period. Given this scenario, Schiff maintains that the dividend structure of the preferred shares will become unsustainable if the underlying asset does not maintain a perpetual bullish trend.
Data from the latest earnings call indicate that the firm holds approximately 818,334 BTC. Schiff argues that Michael Saylor, the company’s chairman, will eventually face a critical decision: liquidate treasury reserves or suspend payments to preferred shareholders.According to Schiff’s view published on social media, the public commitment to defend dividends is a tool to prolong confidence in what he describes as an accumulation model that benefits early investors at the expense of new ones.
Cash Flow Sustainability and STRC Shares
MicroStrategy’s documentation reveals that the company has raised nearly $11.7 billion in capital so far in 2026. These funds have been used to expand its preferred stock stack, which carries recurring dividend obligations. Schiff suggests that, in the face of a liquidity crisis, management will choose to let the value of STRC fall rather than sell its Bitcoin holdings to meet the coupons.
Schiff’s interpretation posits that the firm’s “Digital Credit” model depends on the constant ability to attract fresh capital. The source indicates that STRC shares are designed to trade near a par value of $100, but Schiff projects that any suspension in the payment flow would trigger a profound negative revaluation across the company’s entire capital structure.
Analysts following Saylor’s strategy observe that, as of May 2026, the company has managed to maintain liquidity through at-the-market (ATM) offerings. However, the Q1 earnings report showed an EPS of -$38.25, a figure that, according to the Investing report, was 101% below analyst forecasts, adding pressure to the entity’s financing model.