Peter Schiff: MicroStrategy’s ‘Smart’ Debt Buyback Just Torched 60% of Its Safety Net

Peter Schiff has spent years arguing Bitcoin is simply a mirage, truthful erstwhile helium calls a determination by Michael Saylor a informing sign, it carries weight. On a caller occurrence of The Peter Schiff Show titled "The Debt, the AI Bubble, and Strategy's Liquidity Crisis... It's All Connected," Schiff zeroed successful connected MicroStrategy (NASDAQ:MSTR), present branded Strategy: the company's buyback of zero-coupon convertible notes astatine 92 cents connected the dollar. Saylor pitched it arsenic accretive. Schiff thinks it signals occupation ahead.

The arbitrage that wasn't

Schiff's statement starts with the clip worth of money. The notes did not mature for different 3 years, though bondholders could request repayment successful 2 years, successful June 2028. Because the insubstantial carried nary coupon, 92 cents contiguous is astir what a dollar 2 years retired is worthy erstwhile you relationship for wealth marketplace rates. As Schiff enactment it, "The notes are lone worthy 92 cents due to the fact that there's nary involvement for 2 years. If you springiness maine 92 cents today, that's amended than giving maine a dollar successful 2 years due to the fact that I could instrumentality the 92 cents and I tin gain involvement connected that."

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Strategy paid just worth and gave up the involvement it was already earning connected those dollars. The deeper interest is what the buyback consumed. It ate much than 60% of the liquidity cushion the institution had raised specifically to money the 11.5% output connected its Stretch preferred banal without having to merchantability Bitcoin. The adaptable complaint connected STRC presently sits astatine 11.25%, and the instrumentality has grown to $3.4 billion. That dividend is simply a perpetual obligation. The cushion was the firewall.

Why the cushion matters

Strategy raised $25.3 cardinal of superior successful 2025 and was the largest U.S. equity issuer for the 2nd consecutive year. It sits connected 713,502 bitcoins arsenic of aboriginal February 2026. Q1 2026 equilibrium expanse information shows $2.21 cardinal successful currency against $8.26 cardinal successful full indebtedness and intangibles of $51.65 billion, which is fundamentally the Bitcoin stack astatine just worth (see the company's Q4 2025 net exhibit).

Bitcoin is not cooperating. The plus is down 16% twelvemonth to day and 32.6% implicit the past year, trading astir $73,300. MSTR shares person tracked that pressure. The banal is down 58.3% implicit the trailing twelvemonth and 8.3% successful the past month. Schiff's question is straightforward: "Why did helium stroke done that? Why did helium adjacent bash that? There indispensable person been a batch of unit connected him down the scenes to bargain backmost that debt."