Mallers Critiques Perpetual Preferred Equity Model
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: stocktwits
- Perpetual Preferred Risk: Twenty One Capital CEO Jack Mallers stated that companies issuing perpetual preferred equity are essentially 'signing up to owe money forever', contrasting this with convertible bonds that can be retired through equity conversion, thereby alleviating financial burdens.
- Capital Structure Impact: Mallers emphasized that new perpetual preferreds like the Variable Rate Series A Perpetual Stretch Preferred Stock are non-callable and do not convert to equity, meaning companies will bear an interest burden of approximately 11.5% indefinitely, which could negatively impact their capital structure in the long term.
- Financial Engineering Challenges: Mallers outlined four options for Bitcoin treasury businesses facing underwater positions: selling Bitcoin, issuing dilutive common stock, discontinuing preferred dividends, or finding alternative cash flows to fund perpetual coupons, noting that each option adversely affects at least one stakeholder group.
- Cash Flow Alternatives: Mallers expressed a preference for generating cash flow through Strike's Bitcoin-backed loan business, which has a current addressable market of $20 billion to $30 billion and a long-term potential of $1 trillion to $2 trillion, indicating a strategic exploration of new business models.
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Analyst Views on MSTR
Wall Street analysts forecast MSTR stock price to rise
14 Analyst Rating
12 Buy
2 Hold
0 Sell
Strong Buy
Current: 116.560
Low
229.00
Averages
453.17
High
705.00
Current: 116.560
Low
229.00
Averages
453.17
High
705.00
About MSTR
Strategy Inc. is a bitcoin treasury and business intelligence company. The Company provides cloud-native, artificial intelligence (AI)-powered enterprise analytics software to thousands of global customers. Its Software Business segment is engaged in the design, development, marketing, and sales of enterprise analytics software platform through cloud subscriptions and licensing arrangements and related services. Its Strategy ONE platform provides access to AI-powered workflows, unlimited data sources, cloud-native technologies, and performance to speed up time from data to action. Strategy One delivers visualization, reporting, and embedded analytics capabilities across retail, banking, technology, manufacturing, insurance, consulting, healthcare, public sector, and others. Its Strategy Mosaic is a universal intelligence layer that provides enterprises with consistent definitions and governance across data sources, regardless of where that data resides or which tools access it.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Mallers Critiques Perpetual Preferred Equity Model
- Perpetual Preferred Risk: Twenty One Capital CEO Jack Mallers stated that companies issuing perpetual preferred equity are essentially 'signing up to owe money forever', contrasting this with convertible bonds that can be retired through equity conversion, thereby alleviating financial burdens.
- Capital Structure Impact: Mallers emphasized that new perpetual preferreds like the Variable Rate Series A Perpetual Stretch Preferred Stock are non-callable and do not convert to equity, meaning companies will bear an interest burden of approximately 11.5% indefinitely, which could negatively impact their capital structure in the long term.
- Financial Engineering Challenges: Mallers outlined four options for Bitcoin treasury businesses facing underwater positions: selling Bitcoin, issuing dilutive common stock, discontinuing preferred dividends, or finding alternative cash flows to fund perpetual coupons, noting that each option adversely affects at least one stakeholder group.
- Cash Flow Alternatives: Mallers expressed a preference for generating cash flow through Strike's Bitcoin-backed loan business, which has a current addressable market of $20 billion to $30 billion and a long-term potential of $1 trillion to $2 trillion, indicating a strategic exploration of new business models.
See More
Arthur Hayes Critiques Michael Saylor's Bitcoin Strategy
- Bitcoin Sale Concerns: Arthur Hayes criticized Michael Saylor for using 'Jedi mind tricks' regarding the potential sale of more Bitcoin, noting that the recent sale of 32 BTC for approximately $2.5 million raised further suspicions about the company's intentions, which could undermine investor confidence.
- Liquidity Shift Reasons: Despite increasing concerns about Strategy, Hayes argued that the recent decline in Bitcoin's price is primarily due to liquidity migrating towards AI trading rather than Strategy itself, indicating that market sentiment is influenced by broader technological trends.
- Fed Policy Uncertainty: Hayes expressed skepticism about new Federal Reserve Chair Kevin Warsh, suggesting that his seemingly hawkish stance masks a dovish reality, and he views the establishment of five task forces as merely a stalling tactic that could prolong existing monetary policies.
- Market Sentiment Changes: Although MSTR's stock price fell over 3% on Friday, retail sentiment around MSTR on Stocktwits remained in the 'bullish' zone, indicating that there is still confidence in the company's future performance among investors.
See More
Mexican Billionaire Bullish on Bitcoin Investment
- Bitcoin Investment Belief: Mexican billionaire Ricardo Salinas Pliego firmly believes in Bitcoin's long-term investment value over real estate, holding 70% of his investable portfolio in Bitcoin despite recent market fluctuations, demonstrating strong confidence in its future.
- Asset Allocation Strategy: Salinas advocates viewing Bitcoin as a standalone asset class, suggesting investors allocate a significant portion of their portfolios to Bitcoin, even encouraging people to mortgage their homes to invest in it, a strategy that exceeds the risk tolerance of most investors.
- Bitcoin Value Growth: Since Bitcoin was priced at just $400 in 2016, it has surged to $65,000, with Salinas highlighting that Bitcoin's appreciation far outpaces other currencies, particularly as the U.S. dollar continues to lose purchasing power, which he expects to worsen in the future.
- Future Price Prediction: Salinas believes Bitcoin could reach $1 million within the next decade, aligning with estimates from notable investors, and while no exact timeline is provided, the current price of $65,000 is seen as an attractive investment opportunity.
See More
Salinas Allocates 70% of Portfolio to Bitcoin
- Bitcoin Investment Allocation: Mexican billionaire Ricardo Salinas has allocated 70% of his investable portfolio to Bitcoin, demonstrating his strong conviction in this asset class; despite market fluctuations, he believes Bitcoin outperforms real estate, reflecting an aggressive long-term investment strategy.
- Future Price Expectations: Salinas predicts that Bitcoin could reach $1 million within the next decade, a forecast that aligns with views from industry leaders, indicating significant future investment potential for Bitcoin that may attract more investor interest.
- Historical Performance Comparison: Since Bitcoin was priced at $400 in 2016, its value has surged to $65,000, with Salinas highlighting that the cost of holding Bitcoin has dramatically decreased, showcasing its advantages as a store of value and enhancing its investment appeal.
- Dollar Devaluation Risks: Salinas warns that the purchasing power of the U.S. dollar has declined by 85% since 1976 and is expected to continue depreciating, which increases Bitcoin's attractiveness as an alternative investment, especially against the backdrop of the U.S. debt reaching $39 trillion.
See More
Bitcoin Declines as Fed Signals Rate Hikes Ahead
- Bitcoin Price Fluctuation: Bitcoin traded around $63,000 on June 19, down from $65,000 at the week's start, reflecting market sensitivity to the Fed's interest rate hike signals, which may further weaken investor confidence.
- Bearish Options Traders: Options traders are betting that Bitcoin's price could fall to $52,000 in the coming weeks, indicating a panic sentiment in the market regarding interest rate hikes, potentially leading to more investors exiting digital assets.
- Ethereum Foundation Executive Resignation: Hsiao-Wei Wang, the executive director of the Ethereum Foundation, has resigned, marking turmoil in the organization's leadership that could impact its strategic direction and project advancement.
- New ETF Plans: Franklin Templeton is planning to launch ETFs that convert corporate dividends into Bitcoin, which, if approved, would provide investors with new investment avenues and potentially boost Bitcoin demand.
See More
MicroStrategy's STRC Crash Sparks Digital Credit Crisis
- Digital Credit Stress Test: MicroStrategy's STRC preferred stock crashed to around $82, 18% below its $100 par value, prompting critics to declare the digital credit asset class dead, indicating a significant loss of market confidence in this emerging asset.
- Bitcoin Network Activity Surge: Despite price declines, the Bitcoin Network Activity Index broke above its trend for the first time since mid-2024, indicating a significant increase in on-chain transaction volume and address activity, with daily transaction counts and average transactions per block nearing record highs, showcasing sustained usage of Bitcoin.
- Increased Capital Competition: Digital credit faces pressure from capital flight due to AI listings and a crowded IPO pipeline, with total value locked in DeFi dropping over 55% from approximately $170 billion in October 2025 to around $72 billion now, reflecting a broad market aversion to risk assets.
- Uncertain Future Outlook: Although the STRC crash raises doubts about digital credit, analysts suggest MicroStrategy has enough cash to cover dividends for at least seven months, and its Bitcoin reserves could support payments for decades, indicating potential resilience in this asset class.
See More
Mallers Critiques Perpetual Preferred Equity Model
- Perpetual Preferred Risk: Twenty One Capital CEO Jack Mallers stated that companies issuing perpetual preferred equity are essentially 'signing up to owe money forever', contrasting this with convertible bonds that can be retired through equity conversion, thereby alleviating financial burdens.
- Capital Structure Impact: Mallers emphasized that new perpetual preferreds like the Variable Rate Series A Perpetual Stretch Preferred Stock are non-callable and do not convert to equity, meaning companies will bear an interest burden of approximately 11.5% indefinitely, which could negatively impact their capital structure in the long term.
- Financial Engineering Challenges: Mallers outlined four options for Bitcoin treasury businesses facing underwater positions: selling Bitcoin, issuing dilutive common stock, discontinuing preferred dividends, or finding alternative cash flows to fund perpetual coupons, noting that each option adversely affects at least one stakeholder group.
- Cash Flow Alternatives: Mallers expressed a preference for generating cash flow through Strike's Bitcoin-backed loan business, which has a current addressable market of $20 billion to $30 billion and a long-term potential of $1 trillion to $2 trillion, indicating a strategic exploration of new business models.
See More
Arthur Hayes Critiques Michael Saylor's Bitcoin Strategy
- Bitcoin Sale Concerns: Arthur Hayes criticized Michael Saylor for using 'Jedi mind tricks' regarding the potential sale of more Bitcoin, noting that the recent sale of 32 BTC for approximately $2.5 million raised further suspicions about the company's intentions, which could undermine investor confidence.
- Liquidity Shift Reasons: Despite increasing concerns about Strategy, Hayes argued that the recent decline in Bitcoin's price is primarily due to liquidity migrating towards AI trading rather than Strategy itself, indicating that market sentiment is influenced by broader technological trends.
- Fed Policy Uncertainty: Hayes expressed skepticism about new Federal Reserve Chair Kevin Warsh, suggesting that his seemingly hawkish stance masks a dovish reality, and he views the establishment of five task forces as merely a stalling tactic that could prolong existing monetary policies.
- Market Sentiment Changes: Although MSTR's stock price fell over 3% on Friday, retail sentiment around MSTR on Stocktwits remained in the 'bullish' zone, indicating that there is still confidence in the company's future performance among investors.
See More
Mexican Billionaire Bullish on Bitcoin Investment
- Bitcoin Investment Belief: Mexican billionaire Ricardo Salinas Pliego firmly believes in Bitcoin's long-term investment value over real estate, holding 70% of his investable portfolio in Bitcoin despite recent market fluctuations, demonstrating strong confidence in its future.
- Asset Allocation Strategy: Salinas advocates viewing Bitcoin as a standalone asset class, suggesting investors allocate a significant portion of their portfolios to Bitcoin, even encouraging people to mortgage their homes to invest in it, a strategy that exceeds the risk tolerance of most investors.
- Bitcoin Value Growth: Since Bitcoin was priced at just $400 in 2016, it has surged to $65,000, with Salinas highlighting that Bitcoin's appreciation far outpaces other currencies, particularly as the U.S. dollar continues to lose purchasing power, which he expects to worsen in the future.
- Future Price Prediction: Salinas believes Bitcoin could reach $1 million within the next decade, aligning with estimates from notable investors, and while no exact timeline is provided, the current price of $65,000 is seen as an attractive investment opportunity.
See More
Salinas Allocates 70% of Portfolio to Bitcoin
- Bitcoin Investment Allocation: Mexican billionaire Ricardo Salinas has allocated 70% of his investable portfolio to Bitcoin, demonstrating his strong conviction in this asset class; despite market fluctuations, he believes Bitcoin outperforms real estate, reflecting an aggressive long-term investment strategy.
- Future Price Expectations: Salinas predicts that Bitcoin could reach $1 million within the next decade, a forecast that aligns with views from industry leaders, indicating significant future investment potential for Bitcoin that may attract more investor interest.
- Historical Performance Comparison: Since Bitcoin was priced at $400 in 2016, its value has surged to $65,000, with Salinas highlighting that the cost of holding Bitcoin has dramatically decreased, showcasing its advantages as a store of value and enhancing its investment appeal.
- Dollar Devaluation Risks: Salinas warns that the purchasing power of the U.S. dollar has declined by 85% since 1976 and is expected to continue depreciating, which increases Bitcoin's attractiveness as an alternative investment, especially against the backdrop of the U.S. debt reaching $39 trillion.
See More
Bitcoin Declines as Fed Signals Rate Hikes Ahead
- Bitcoin Price Fluctuation: Bitcoin traded around $63,000 on June 19, down from $65,000 at the week's start, reflecting market sensitivity to the Fed's interest rate hike signals, which may further weaken investor confidence.
- Bearish Options Traders: Options traders are betting that Bitcoin's price could fall to $52,000 in the coming weeks, indicating a panic sentiment in the market regarding interest rate hikes, potentially leading to more investors exiting digital assets.
- Ethereum Foundation Executive Resignation: Hsiao-Wei Wang, the executive director of the Ethereum Foundation, has resigned, marking turmoil in the organization's leadership that could impact its strategic direction and project advancement.
- New ETF Plans: Franklin Templeton is planning to launch ETFs that convert corporate dividends into Bitcoin, which, if approved, would provide investors with new investment avenues and potentially boost Bitcoin demand.
See More
MicroStrategy's STRC Crash Sparks Digital Credit Crisis
- Digital Credit Stress Test: MicroStrategy's STRC preferred stock crashed to around $82, 18% below its $100 par value, prompting critics to declare the digital credit asset class dead, indicating a significant loss of market confidence in this emerging asset.
- Bitcoin Network Activity Surge: Despite price declines, the Bitcoin Network Activity Index broke above its trend for the first time since mid-2024, indicating a significant increase in on-chain transaction volume and address activity, with daily transaction counts and average transactions per block nearing record highs, showcasing sustained usage of Bitcoin.
- Increased Capital Competition: Digital credit faces pressure from capital flight due to AI listings and a crowded IPO pipeline, with total value locked in DeFi dropping over 55% from approximately $170 billion in October 2025 to around $72 billion now, reflecting a broad market aversion to risk assets.
- Uncertain Future Outlook: Although the STRC crash raises doubts about digital credit, analysts suggest MicroStrategy has enough cash to cover dividends for at least seven months, and its Bitcoin reserves could support payments for decades, indicating potential resilience in this asset class.
See More
