Notable economist and market analyst Peter Schiff has taken aim at Strategy Inc.’s MSTR for its debt-driven Bitcoin BTC/USD acquisitions, highlighting the downturn in the company’s stock price and the diminishing Net Asset Value premium.
What Occurred: Schiff remarked on X that even though the firm’s co-founder Michael Saylor boasted about his leveraged Bitcoin purchases yielding 6.9% this year, the share price has seen a decline of 6%.
He noted that the “significant dilution” has eroded shareholder value, leading to an 85% decrease in the premium relative to its Bitcoin holdings.
The NAV premium assesses the company’s market value in relation to its Bitcoin asset value. Current data from the MSTR tracker shows a premium of 1.604, equating to 60%, a drop from 2.148, or 148%, on January 19.
Generally, a high premium indicates the market’s confidence in the company’s Bitcoin investment strategy.
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Why It’s Significant: Strategy’s approach to Bitcoin has faced criticism, with some commentators like Schiff doubting its success.
Last week, he cautioned that if the company’s shares continue to trade below the value of its Bitcoin holdings, it could result in a negative yield on Bitcoin.
Strategy has been a pioneer in corporate Bitcoin adoption, amassing a reserve of 478,740 BTC, valued at more than $44 billion, as reported by bitcointreasuries.net. The company recently disclosed its purchase of 20,356 BTC for around $1.99 billion on Monday.
Price Movement: As of this writing, Bitcoin was priced at $92,098.54, reflecting a 4.18% decrease over the past 24 hours, according to data from Benzinga Pro.
Shares of MicroStrategy decreased by 2.21% in after-hours trading after closing down 5.65% at $282.76 during the Monday trading session.
Image via Shutterstock
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