🚨 Kevin Warsh, tipped to lead the Fed after Powell's departure, declares investments including Polymarket, SpaceX, and crypto assets, according to Reuters.
Michael Saylor just created an annual dividend invoice of 1.2 billion dollars on a company that generates no profit.
And it grows bigger every month.
Strategy has issued 11.3 billion dollars of preferred shares spread across 5 different series since January 2025.
The rates are brutal: 8% to 11.5%.
Here’s what he owes each year:
- STRC: 731 M$ at 11.5% - STRD: 135 M$ at 10% - STRF: 128 M$ at 10% - STRK: 112 M$ at 8% - STRE: 89 M$ at 10%
Total: 1.2 billion dollars per year. In cash. Forever.
The software business? It lost 112 million dollars in free cash flow last year. It cannot pay a single month of these dividends.
So, where does the money come from?
The issuance of new MSTR shares. Every dollar of dividends is financed by printing more common shares.
Saylor has pre-financed the next two years with a cash reserve of 2.25 billion dollars raised through share issuance.
But new preferred shares are issued every week. The reserve will run out.
And there are still 30.5 billion dollars of available preferred capacity. If he uses it, annual dividends could reach 4 billion dollars per year.
On April 12, Saylor stated that Bitcoin only needs to grow by 2.05% per year to cover everything. The calculations are correct.
But dividends are paid in cash. The appreciation of Bitcoin is not cash.
To turn Bitcoin gains into cash, he has only 3 options:
1. Sell Bitcoin (he promised to never do that) 2. Issue more MSTR shares (destroys value for shareholders when the stock trades below NAV) 3. Stop the dividends (STRF and STRE dividends soar to 18% if they are not paid)
The American stock market has added more than 5 trillion dollars in the last 15 days, and the S&P 500 is only 0.50% away from hitting a new all-time high.
Meanwhile, Bitcoin is still down -40% from its all-time high of $126,000.