---
title: 'Michael Saylor’s Collapsing Strategy'
source: 'https://youtube.com/watch?v=5jET6C-E3j0'
video_id: '5jET6C-E3j0'
date: 2026-07-01
duration_sec: 758
---

# Michael Saylor’s Collapsing Strategy

> Source: [Michael Saylor’s Collapsing Strategy](https://youtube.com/watch?v=5jET6C-E3j0)

## Summary

Michael Saylor's MicroStrategy is facing a severe financial crisis as Bitcoin prices fall. The company has authorized the sale of up to $1.25 billion in Bitcoin to fund preferred stock dividends, revealing the unsustainability of its leveraged Bitcoin strategy. The analysis highlights how stock issuance has destroyed massive corporate value and why the STRC preferred stock is structurally flawed.

### Key Points

- **Bitcoin Sale Authorization** [0:05] — MicroStrategy authorized selling up to $1.25 billion of Bitcoin to fund its USD reserve and pay preferred stock dividends.
- **Stock Issuance Destroys Value** [3:12] — Issuing 12.6 million shares raised $1.1 billion but caused the stock price to drop 21% from $114 to $90.
- **$7.50 Value Destruction per Dollar** [4:06] — For every dollar raised through stock issuance, $7.50 of corporate value was destroyed.
- **STRC Dividend Policy Revision** [6:48] — STRC dividend policy changed from fixed 10% to a variable rate evaluated monthly to reduce Bitcoin sales.
- **STRC's Junior Debt Position** [8:42] — STRC is junior to over $9 billion in MicroStrategy debt, making its $100 liquidation preference effectively worthless.

## Transcript

Well, well, well. Michael Sailor is back
at it again. This time, potentially
selling up to $1.25
billion
of Bitcoin in a new 8K just out. We've
also got a revision to the stretch STRC
policy. Boy, we've got a lot to talk
about here. Let's first look at some
price action. So obviously uh Bitcoin
has come off of its uh last year highs
pretty dramatically from that 126 had a
lot of struggle bust to try to come back
up here. We just really have not been
able to recover. Uh and Micro Strategy
the stock itself has essentially
followed a similar pattern. Keep in mind
the company has been issuing more shares
of Micro Strategy to raise money. In
fact, they just raised another billion
dollars by issuing shares. You could see
this right here. Look at this. During
the period of June 22nd to June 28th,
which is really just about a week, they
raised another $1.1 billion by selling
over 12.6 million of MSTR class A common
stock. Mind you, on their Bitcoin right
now, they're at over a $13 billion loss.
So, we're clearly upside down on Bitcoin
holdings over at Microsoft. But look at
this. You can see here just over this
last week, you get this sort of
accelerated volume. See these higher
volume candlesticks right here. A lot of
this was actually just Michael Sailor
hitting the sell button on Micro
Strategy stock. Now, it's been very
common for Michael Sailor to say, "Hey,
I can raise an infinite amount of money
uh by just issuing stock at Micro
Strategy. I could always just issue
stock and I don't have to worry about
selling my Bitcoin because I could
always just issue stock. So as a result
we created all these different preferred
options like stretch you know STRC the
uh uh preferred perpetual preferred here
where we'll just pay these cash
dividends as long as you invest at this
company that should be trading around
$100 per share and you'll earn 10% on
your money even though the company does
nothing and it'll be funded by basically
Bitcoin going up which is great when
Bitcoin goes up and as usual terrible
when Bitcoin goes down. And since
Bitcoin has gone down, Strategy or STRC
has now lost its $100 ideal trading
level.
And now Micro Strategy, Michael Sailor,
starting to realize, wow, it's actually
not that easy to raise money selling
Micro Strategy stock because as soon as
we go to sell a billion dollars worth of
stock, we tank the stock price. In fact,
literally on the 20 uh let's go to the
day before on the uh yeah, okay, we'll
go to the 18th over here. That's the
trading day before. On the trading day
before they started selling these 12
million Micro Strategy shares, they
closed at about $114
per share. As they completed their
offering uh on the 28th, which would
basically be the open price here, they
were down at $90. So basically to go
raise $1 billion,
they ended up having to decay their
stock price by
21%.
Think about that for a moment. They
raised a billion at a $31 billion market
cap company. At that point, it was about
a $35 billion company. So they raised
about $2.8%
of the value of the company. They took
2.8% of the value of the company and
turned it into cash.
In doing so, they destroyed
21%
of the value of the company. That means
for every dollar that they raise in the
stock market, they are burning about
$7.5
of corporate value. Think about that.
I'm going to go raise a dollar. And in
doing so, by raising a dollar, I am
lighting an extra 6 and a half on fire.
That sounds And that's exactly
why Michael Sailor realizing that it's
not that easy when your stock is
plummeting uh to go to the market and
say, "Hey, we want to sell more of the
stock." Once he realizes, "Wow, it's not
that easy to actually sell stock that's
plummeting. You know, who wants to buy
it?" What does he now announce? Uh, hey
guys, we're actually going to have to
sell Bitcoin. Here's the 10K from Micro
Strategy. And they say right here, the
company's board of directors has
authorized a Bitcoin monetization
program. Yes, we are now going to turn
Bitcoin into fiat
in which the company may sell Bitcoin
from time to time for three purposes. We
want to generate up to $1.25 billion of
extra money so we can fund our USD
reserve. Why do we need our USD reserve?
Well, of course, to pay preferred stock
dividends because the freaking preferred
stocks are collapsing and we owe the
dividends nonetheless. But of course,
because there's so much pressure now
because of these dividends and we
promised we were going to pay so many
dividends through the STRC perspectus,
which I made a really big video on uh
back in November. It was about 6 months
ago. Uh and I said you should run away
from this, that this was likely a Ponzi
scheme. Uh in fact in our alpha reports
which we release every single morning
and uh every single morning the market
is open almost every single morning the
market is open unless I'm like on
vacation or something like that. Uh and
even then I still send send them out. At
the very bottom I actually include a
section where I call STRC a likely
Ponzi. I am bearish Micro Strategy by
default, but if I'm a 6 out of 10
bearish on Micro Strategy, I'm a 20 out
of 10 bearish on STRC. And I think that
STRC will fail disastrously.
So why did I think that back then? Well,
I'll break it down to you. It's not just
the fact that Michael Sailor now has to
sell Bitcoin, which lowers Bitcoin
prices in order to raise cash to pay the
dividends, which were supposed to enable
him to buy more Bitcoin through his
preferred funds. It's not just that
problem, but it is also the problem that
Michael Sailor is now rugpulling the
very dividend that he advertised. Take a
look at this STRC dividend policy. The
company announced a revised dividend
policy for its variable rates series A
per perpetual stretch preferred stock
STRC stretch. Going forward, the company
intends to evaluate the stretch dividend
on a monthly basis based on basically
how much it's sucking. So in other
words, we won't necessarily pay a 10%
dividend anymore. We might pay a lower
amount or a different amount is the
argument here. Now, why would they do
that? So that they have to sell less
Bitcoin. That's it. The whole goal is,
hey, maybe maybe if we pay a lower
dividend, we won't have to sell as many
Bitcoin.
Now, why is there a problem with STRC?
Why did I say 6 months ago that this is
a scam? Well, first of all, 6 months
ago, they literally said right here, and
nobody paid attention to it, except, you
know, we talked about it, but most
people didn't pay attention to it. This
overall strategy also contemplates that
we may periodically sell Bitcoin. They
literally, like the attorneys were good
at this. They told you they might end up
having to sell Bitcoin.
Like, that was obvious.
But another thing that's pretty wild is
when you look at the liquidation
preference for this company, they argue
that, oh well, you know, the liquidation
preference for this company is $100 per
share. So, you know, if we liquidate
you, we'll pay you $100 per share. But
that guarantee only works as well as
they actually have money to pay the
guarantee. It's not a guarantee, right?
But they're basically saying, "Look, if
we liquidate you, we'll pay you $100 a
share." But I said that this is a scam
because it's subject to their solveny I
wrote. Okay. So what's their solveny?
Well, it all comes down to the debt. And
here I wrote down a quick little summary
of where the debt is. STRC is junior to
all liabilities of MSTR and STRF.
So basically, every single dollar of
debt that Micro Strategy itself has has
to get paid first before STRC gets a
dime. But the problem with that is Micro
Strategy has way more debt than STRC has
ever raised as a fund. That is scary
because it basically means the
liquidation preference means nothing.
And so it's no surprise that now the
stock is falling and people are like,
wait, how is this possible? The
liquidation preference, it's at $100.
And again, I'm like, it doesn't matter
because you have to compare it to the
debt that Micro Strategy has. Look, STRF
uh has about a billion.1 in debts and
then you've got another about 8.24
billion in aggregate indebtedness over
at uh Micro Strategy. So when you add
that together, you've got to get through
almost $10 billion in actual debt before
STRC has any money available to it. STRC
right now has a market cap of about $4
billion, which is remarkable that it's
that high. But the point is there's
almost there almost $2 worth of debt for
every dollar of money that's sitting in
STRC.
And it's not even for STRC's purposes.
It's just to bail out Micro Strategy.
And Micro Strategy
is actually up 8% today because of the
idea that wow, maybe they'll have to pay
fewer dividends. That's great. More cash
for Micro Strategy. But let's not kid
ourselves just because there's some
enthusiasm intraday. Look at the overall
trend for this puppy. The trend for this
is driven by the fact that the
underlying momentum thesis that Bitcoin
will go up forever has broken. Now, does
that make Bitcoin bad? No. I'm not here
to dump on Bitcoin. I'm here to dump on
Michael Sailor because I called this a
scam in my opinion. You know, no
guarantees, but I thought it was a scam
day one. And I still think it's a scam.
And so, it's not a surprise to me that
now sell Bitcoin is turning into, well,
when we sell Micro Strategy stock, we're
actually losing $7.5 for every dollar we
raise. This is stupid. Let's just go
sell Bitcoin instead. Because when we go
announce that we're going to sell a
billion dollars of Bitcoin, Bitcoin goes
down like 500 bucks or 1,000 bucks.
Like, who cares? That's the idea is that
they could actually cause less damage by
selling Bitcoin. Now, hopefully for the
Bitcoin fans, this is just part of the
four-year cycle. Hopefully, this is just
a down period where Michael Sailor says,
"Hey, look, we're going to sell some
Bitcoin just to kind of keep the company
alive, to keep the preferreds going."
Uh, we are, you know, after all, trying
to quote unquote preserve long-term
Bitcoin exposure. Uh, so we are going to
preserve not selling our Bitcoin by
selling our Bitcoin.
Um
maybe, but obviously they've signed
themselves up for a whole lot of
obligations. And I think if anybody
needs to pray to the Pope or to wherever
you pray, it's Michael Sailor. And he
could always use the coupon code pope by
going to meet Kevin.com, joining the
courses on building your wealth, where
you would have known 6 months ago that
STRC, in my opinion, is a giant scam.
Why not advertise these things that you
told us here? I feel like nobody else
knows about this.
>> We'll we'll try a little advertising and
see how it goes.
>> Congratulations, man. You have done so
much. People love you. People look up to
you.
>> Kevin Pra there, financial analyst and
YouTuber. Meet Kevin. Always great to
get your take.