Prominent American economist, stockbroker, and financial commentator Peter Schiff has criticized MicroStrategy’s recent $1.44 billion stock sale, describing the company’s business model as fraud, and labeling CEO Michael Saylor “the biggest con man on Wall Street.”
In a post on X, Schiff claimed that MicroStrategy sold stock not to acquire more Bitcoin, as the market might expect, but to generate U.S. dollars to fund interest and dividend obligations.
He wrote,
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“Today is the beginning of the end of $MSTR. Saylor was forced to sell stock not to buy Bitcoin, but to buy U.S. dollars merely to fund MSTR’s interest and dividend obligations. The stock is broken. The business model is a fraud, and Saylor is the biggest con man on Wall Street.”
“Don’t expect the mainstream financial media to tell you the truth about what MicroStrategy was just forced to do to delay its ultimate demise”, he added in a subsequent post.
Schiff predicts that Strategy could suffer a massive crash following its establishment of a USD reserve for dividend payments, a move that has allayed fears that the company would have to sell its BTC holdings to pay them.
He further explained that the company’s new approach involves selling stock to raise cash, investing that cash in Treasuries yielding approximately 4%, while using it to cover debt and preferred stock costs of 8%–10%. He questioned how long investors would continue to support this model “just to gamble on Bitcoin.”
Recently, MicroStrategy announced the creation of a $1.44 billion U.S. dollar reserve and an increase in its Bitcoin holdings to 650,000 BTC. Michael Saylor, Founder and Executive Chairman, stated, “Establishing a USD Reserve to complement our BTC Reserve marks the next step in our evolution, and we believe it will better position us to navigate short-term market volatility while delivering on our vision of being the world’s leading issuer of Digital Credit.”
MicroStrategy President and CEO Phong Le added that the USD reserve is intended to cover 21 months of dividends, reflecting the company’s commitment to credit investors and shareholders while reinforcing its role in the broader Bitcoin ecosystem.
Schiff’s criticism comes as MicroStrategy’s leveraged ETFs have been severely impacted by the ongoing cryptocurrency downturn. According to a Reuters report, the T-Rex 2X Long MSTR Daily Target ETF and Defiance Daily Target 2x Long MSTR ETF, both designed to deliver twice the return of MicroStrategy shares, have lost nearly 85% of their value so far in 2025. The T-Rex 2X Inverse MSTR Daily Target ETF has declined by 48% over the same period.
MicroStrategy shares have fallen more than 40% this year, with declines driven by Bitcoin’s drop below $90,000. Since joining the Nasdaq 100 index, the company’s shares have more than halved, sliding roughly 70% from their November 2024 peak.
Despite the steep declines, analysts’ ratings have remained relatively optimistic. Of the 16 brokerages covering the stock, 10 rate it a “buy” equivalent, four “strong buy,” and two “hold,” with a median price target of $485, implying a potential 183% gain over the next 12 months, according to LSEG data.
Saylor is scheduled to deliver a keynote titled “The Undeniable Case for Bitcoin” at a Binance conference in Dubai this Wednesday.