Has Michael Saylor’s Strategy built a house of cards?

Has Saylor pushed Strategy too far? With MSTR at the center of clashing leveraged ETFs and convertible stock plays, the market is making its own bets.

Strategy Inc, formerly MicroStrategy, has discarded its core product, assumed a new identity, swallowed over half a million Bitcoin, spawned equity classes with double-digit yields, and inspired an arsenal of leveraged exchange-traded funds (ETFs) — a unique and significant market phenomenon.

Michael Saylor’s firm has constructed a comprehensive financial framework based around Bitcoin (BTC), tying its corporate performance directly to the cryptocurrency’s price fluctuations. As a result, Strategy’s common stock has evolved into a proxy for Bitcoin exposure, its preferred shares offer yields tied to cryptocurrency risk, and a series of leveraged and inverse ETFs now track its equity movements, all fundamentally connected to its substantial Bitcoin holdings.

Recently, there was an announcement of another purchase by MSTR (Strategy’s common equity) of close to $2 billion of BTC in one clip, inviting even more raised eyebrows and caution.

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