Michael Saylor, Executive Chairman of Strategy Inc. (NASDAQ:MSTR), defended his company’s business model on Wednesday, asserting that it can withstand Bitcoin’s (CRYPTO: BTC) fluctuations and continue to provide value to shareholders.
Strategy Is ‘Indestructible,’ Says Saylor
During an interview with Fox Business, Saylor stated that as long as Bitcoin increases by 1.25% annually, Strategy can maintain its dividend payments indefinitely and boost shareholder value.
“If Bitcoin stops going up, 0% forever, we got about 80 years to figure out what we’re going to do about that,” the Strategy co-founder said.
Saylor said that the company expects Bitcoin to grow about 30% annually for the next 20 years.
Company Prepared For 80%-90% Drawdown
The Bitcoin bull claimed that Strategy is “engineered” to endure an 80 to 90% drawdown and continue operating. He described the company’s leverage as “extremely robust,” currently at 10 to 15% and trending “toward zero.”
“So, I think we’re pretty indestructible,” he added.
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A Test For Saylor’s Strategy?
Saylor’s comments came amid a significant slump in Bitcoin’s value, which has severely impacted Strategy’s stock.
Strategy is now valued almost entirely on the strength of its Bitcoin holdings rather than net income. While BTC has shed 14.80% of its value in a month, MSTR has plunged as much as 37%.
Economist Peter Schiff, a well-known Bitcoin critic, warned of a potential ‘death spiral’ for Strategy, arguing that the company’s high-yield preferred shares are misunderstood by investors.
On the other hand, Fundstrat strategist Tom Lee argues that MSTR could eventually become a market leader if Bitcoin recovers.
Price Action: At the time of writing, BTC was exchanging hands at $91,858.65, down 2.41% in the last 24 hours, according to data from Benzinga Pro.
Strategy shares spiked 4.02% in after-hours trading after closing 9.82% lower at $186.50 during Wednesday’s regular trading session.
The stock demonstrated an average growth score — a measure of the stock's combined historical expansion in earnings and revenue across multiple periods. How does it compare with Coinbase Global Inc. (NASDAQ:COIN) and other cryptocurrency-linked stocks? Visit Benzinga Edge Stock Rankings to find out.
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