Strategy takes Bitcoin buying breather ahead of Q1 earnings report

Strategy, the world’s biggest public Bitcoin holder, is taking a break from crypto purchases as the company readies its first quarter earnings report, slated for Tuesday.

On Sunday, Executive Chairman Michael Saylor announced “No buys this week” in a post on X, where he has regularly provided a signal of planned purchases.

In its most recent purchase, the Tysons Corner, Virginia-based company acquired 3,273 Bitcoin for $255 million between April 20 and 26, according to an 8-K filing with the US Securities and Exchange Commission on April 27.

Source: Michael Saylor on X

The company now holds 818,334 BTC, bought at an average price of $77,906 per coin, raising Strategy’s cost basis to $75,537. The biggest crypto by market cap was last trading on Sunday at $78.787.08, according to CoinGecko data.

Strategy’s purchases last month, along with US spot price exchange-traded fund inflows, helped stoke a 12% increase in BTC’s price during April.

Related: Bitcoin preps highest weekly close since January as BTC price nears $79K

Quarterly loss expected amid scrutiny over STRC dividend

Wall Street analysts are expecting Tuesday’s earnings report to show a loss of $18.98 per share, mainly due to management’s mark-to-market Bitcoin accounting. That compares to the year-earlier period’s loss of $16.49, according to Yahoo Finance data. 

On Wednesday, Saylor is scheduled to speak at the Consensus industry conference in Miami Beach, Florida.

The company’s reliance on STRC, Strategy’s perpetual preferred security, has raised concerns among some stock watchers, primarily because of the 11.5% dividend yield that the asset offers investors. 

Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, who has previously called Strategy a “Ponzi scheme,” on Sunday repeated his allegation, questioning the company’s ability to sustain the dividend.

“Gambling that Bitcoin will rise by more than 11.5% a year does not change the Ponzi like structure of STRC,” he said in a post on X.

Source: Peter Schiff on X

Concern about the STRC dividend also came from Seeking Alpha blogger Joseph Parrish, who said in his April 28 post that the current cash reserves are insufficient to cover two years of STRC dividends, which will ultimately force continued sale of Strategy’s common stock and raises investor risk if Bitcoin underperforms.

He rates the company stock, which trades under the MSTR ticker, as a “Hold,” citing increased leverage, uncertain catalysts, and challenging risk management despite a lower stock price. His opinion stands in contrast with other analysts, according to financial engine TipRanks, which shows a consensus of a “Strong Buy” rating on Strategy’s Nasdaq-listed shares.

Related: ‘Historical average’ could push Bitcoin bottom at $57K level: Analyst

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