Michael Saylor’s Strategy under strain as bitcoin bets falter

Michael Saylor’s company, Strategy (formerly MicroStrategy), has come under strain as its plan to convert the software firm into a Bitcoin-focused treasury faces losses and mounting financial obligations. Over the past six years Mr. Saylor used share issuances, borrowing and other financial tools to funnel much of the company’s available funds into Bitcoin, and Strategy held $23.9 billion of the cryptocurrency at the end of 2024, according to filings.

The gambit propelled the stock to as high as $474 a share last summer and helped make Mr. Saylor, who owns nearly half the company’s controlling shares, wealthy on paper; he was estimated to be worth more than $10 billion, the article said. Strategy has also marketed new investment products — preferred shares with names such as Strike, Strife and Stretch that pay dividends of 8 to 11 percent — and relied heavily on convertible debt, some sold at near-zero interest, to finance further Bitcoin purchases.

Credit agency Standard & Poor’s reassigned Strategy a junk rating; the company’s Bitcoin holdings fell by $17 billion in the fourth quarter, according to company disclosures, and the stock now trades far below its peak. Pressure is growing: the company owes about $21 billion to lenders and preferred shareholders, is on the hook for more than $844 million in the next year and faces roughly $5 billion of convertible loans due in the next three years.

Key Topics

Business, Michael Saylor, Strategy, Bitcoin, Preferred Shares, Convertible Debt