Peter Schiff warns MicroStrategy dilution risk grows

Peter Schiff has warned that MicroStrategy’s aggressive Bitcoin acquisition strategy could lead to significant shareholder dilution.

The criticism centres on the company’s shift toward higher-cost financing as macroeconomic conditions tighten, including issuing preferred shares to fund further purchases of Bitcoin.

Schiff said the strategy is becoming unsustainable, noting, “Now it's forced to issue preferred shares with an 11.5% yield.”

He argued that MicroStrategy’s core software business does not generate enough earnings to support these obligations, raising concerns about long-term financial stability.

“Since MSTR has no earnings, this obligation can only be satisfied by selling more preferreds, discounted common, or Bitcoin,”

Schiff added, warning of a potential dilution spiral.

The critique comes as the company continues to rely on capital markets to expand its Bitcoin holdings, a strategy championed by executive chairman Michael Saylor.

Schiff and other critics, including investor Frank Giustra, argue that sustained reliance on debt and equity issuance could eventually force asset sales or erode shareholder value.

At the time of reporting, Bitcoin price was $75,478.84.