Peter Schiff Accuses MicroStrategy (MSTR) of Fraudulent Business Model & Challenges Michael Saylor to Debate

On November 21, 2025 (EST), economist Peter Schiff (Euro Pacific Asset Management) accused MicroStrategy (NASDAQ:MSTR) of operating a “fraudulent business model,” predicting bankruptcy regardless of Bitcoin’s price trajectory. Schiff highlighted the risk of a “death spiral” from preferred shares if dividend obligations are unmet, challenging Chairman Michael Saylor to a debate at Binance Blockchain Week (December 2025). Saylor countered that MSTR could cover dividends even during an 80% Bitcoin drawdown. The company’s premium to net asset value (NAV) collapsed from over 2.5x to below 1x amid copycat competition and Bitcoin’s slide.

: [3] (Yahoo Finance via Ticker News Tool)

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• Stock Price Drop
  : MSTR closed at $170.50 on November 21, down 3.74% intraday [0]. Over 10 days, the stock fell from $238.88 (Nov10) to $170.50 (Nov21), a 28.6% decline [1].
• High Volume Selling
  : Nov21 volume was 29.33M shares, 2.3x the average [0], indicating panic selling tied to Schiff’s accusations.

• Bearish Sentiment
  : MSTR’s 1-month performance is -43.53% [2], reflecting investor concern over Bitcoin’s volatility and the sustainability of its business model.
• Index Exclusion Risk
  : JPMorgan warned MSCI’s potential exclusion of MSTR from major indices could trigger $2.8B-$8.8B in outflows [3] (Bitcoin Magazine), exacerbating pressure.

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Metric	Value	Source
Market Cap	$48.97B	[0]
P/B Ratio	0.80x	[2]
ROE	-1.67%	[2]
Net Profit Margin	-141.24%	[2]
Current Ratio	0.66	[2]
Bitcoin Holdings (Q32025)	640,808 BTC	[1] (Bitget News)

• NAV Premium Collapse
  : The P/B ratio of 0.80x confirms the market values MSTR below its book value [2], aligning with the NAV premium drop to <1x [event content].
• Negative Profitability
  : ROE and net margin are deeply negative [2], raising questions about MSTR’s ability to cover preferred share dividends without new issuances.

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1. Directly Impacted
   :
   • MSTR Common Stock (NASDAQ:MSTR)
   • MSTR Preferred Shares (STRK, STRF, STRD, STRC) (dividend rates up to 10% [web search result 2])

2. Related Sectors
   :
   • Crypto Proxies (e.g., COIN, BITF)
   • Software (MSTR’s core business contributes a 23.13% operating margin [2], but it is overshadowed by Bitcoin holdings).

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• Exact dividend coverage ratio for preferred shares (can MSTR cover payments with operating cash flow alone?).
• Breakdown of preferred share outstanding amounts and annual dividend obligations.
• Bitcoin’s short-term price trajectory (key driver of MSTR’s valuation).

1. Death Spiral Risk
   : Schiff’s warning about preferred shares (dividends funded by new issuances) could trigger a cycle of falling prices and failed payments [event content].
2. Liquidity Risk
   : Current ratio of 0.66 <1 [2] indicates MSTR may struggle to meet short-term obligations.
3. Negative Profitability
   : ROE (-1.67%) and net margin (-141.24%) [2] signal long-term sustainability issues.

• Users should be aware that MSTR’s negative financial metrics and Bitcoin’s volatility may significantly impact its ability to sustain dividend payments.
• The potential MSCI index exclusion and Schiff’s accusations warrant careful monitoring of MSTR’s liquidity and investor sentiment.

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1. Bitcoin price movements (daily trends).
2. MSCI’s January 2026 decision on index inclusion.
3. MSTR’s next dividend declaration (Sept2025: $3.0556 for STRD, $2.50 for STRF [web search result2]).
4. Outcome of the proposed debate between Schiff and Saylor (if scheduled).

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[0] Real-Time Quote Tool (MSTR)
[1] Daily Prices Tool (MSTR)
[2] Company Overview Tool (MSTR)
[3] Ticker News Tool (MSTR)
[event content] User-provided event summary
[web search result1] Bitget News: MicroStrategy Q32025 Bitcoin Holdings
[web search result2] CoinDesk: MSTR Preferred Share Dividends

: This analysis is for informational purposes only and does not constitute investment advice. Market conditions are subject to rapid change.
: MSTR’s negative profitability, liquidity risk, and potential death spiral from preferred shares pose significant risks to investors. Proceed with extreme caution.