Michael Saylor’s Strategy is now facing criticism from well-known industry figure Jeff Dorman, CIO of ARCA Investing. Dorman believes the company may have taken on more risk than expected while betting on a strong Bitcoin rally.
Although he says he is not part of Michael Saylor’s inner circle, he thinks Strategy likely built its recent financing plans around the idea that Bitcoin was about to move much higher in price.
In a recent tweet post, Dorman highlighted that Strategy now has roughly $15 billion in preferred securities carrying about $1.5 billion in annual dividend obligations.
As Bitcoin weakened and investors became more cautious, the company raised an additional $2 billion through stock issuance.
According to Dorman, that move was logical because it created nearly two years of cash runway to cover dividend payments and reduced immediate concerns about liquidity.
Today, Strategy remains the largest public corporate holder of Bitcoin, owning 843,738 BTC, representing approximately 4.02% of Bitcoin’s total supply.
The company has spent about $63.87 billion building its Bitcoin position at an average purchase price of $75,699 per BTC.
The part that puzzled Dorman most was what happened next.
Rather than preserving the newly raised cash, Strategy used some of it to repurchase bonds maturing in 2029 at a discount.
While the buyback may have been mildly beneficial financially, Dorman questioned why a company facing future cash obligations would use its limited liquidity to retire debt that carried a 0% coupon.
He suggested the decision may indicate a larger capital markets plan that has not yet been revealed.
Dorman believes the next few months could be very important for Strategy, Bitcoin holders, and preferred shareholders. The company may be able to refinance its debt or raise new funding, but if market conditions stay weak, it could eventually be forced to sell some of its Bitcoin holdings.
A recovery in Bitcoin could quickly reduce the pressure. However, if Bitcoin continues struggling, Dorman warns that the strategy’s financial setup could face serious stress, affecting both investors and the wider crypto market.
Despite the concerns, Michael Saylor has repeatedly proven critics wrong over the years, often finding new ways to raise capital and expand Strategy’s Bitcoin exposure.
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