Economist Peter Schiff questioned on Thursday how Strategy Inc. (NASDAQ:MSTR) can sustain the 11% dividend payout on its Perpetual Stretch Preferred Stock (NASDAQ:STRC), citing the company’s ongoing financial challenges.

Saylor Says SRTC Providing Yield With Less Volatility

It all started when Strategy founder Michael Saylor took to X, highlighting how the Bitcoin-backed preferred stock delivered 11% annual dividend, paid monthly in cash.

Saylor attached a chart showing STRC’s 6% historical volatility, significantly lower than the Strategy’s Class A shares and the iShares Bitcoin Trust ETF (NASDAQ:IBIT), the world’s largest Bitcoin exchange-traded fund.

“STRC delivers the first 11% of BTC ARR with ~85% of the volatility engineered out,” Saylor wrote.

Schiff Asks Where’s The Money Coming From

However, economist and Bitcoin critic Peter Schiff was not amused. He claimed “MSTR is losing money” and questioned where the company is getting money to pay yields on its instruments.

Is The Bitcoin Proxy Strategy Viable?

The stock has more than halved in value over the last six months, significantly underperforming Bitcoin itself. 

Strategy’s market valuation stands at $47.50 billion, while its Bitcoin holdings are valued at nearly $59 billion. This means that the stock is trading at a discount to its net asset value.

The company is set to report its fourth-quarter financials next Thursday.

Price Action: At the time of writing, BTC was exchanging hands at $82,387, down 6.42% in the last 24 hours, according to data from Benzinga Pro.

Strategy shares fell 0.13% in after-hours trading after closing 9.63% lower at $143.19 during Thursday’s regular trading session. Year-to-date, the stock has fallen 5.77%.

MSTR maintains a weaker price trend over the short, medium, and long terms with a poor Value ranking, according to Benzinga’s Edge Stock Rankings.

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