Ripple CEO Flags MicroStrategy Stock Trading 26% Below Par Value
MSTR•Donald Garlinghouse, Ripple CEO, called MicroStrategy's STRC perpetual preferred stock a "damning indictment" as it trades roughly 26% below its $100 par value. He highlighted that MicroStrategy's annualized dividend obligations of $1.2 billion have narrowed coverage from over seven years to about 14 months.
1. Garlinghouse Critique of STRC Structure
Donald Garlinghouse, CEO of Ripple, labeled MicroStrategy's leveraged Bitcoin acquisition model a "damning indictment", pointing to its STRC perpetual preferred stock trading at an approximate 26% discount to the $100 par value.
2. STRC Pricing and Dividend Coverage
STRC shares have slid to about $74 while annualized dividend payments have risen to roughly $1.2 billion, shrinking the dividend coverage window from more than seven years to around 14 months and stoking investor concerns.
3. Bitcoin Sales to Fund Dividends
In late May, MicroStrategy liquidated 32 Bitcoin to fund STRC dividend payments—its first BTC sale since launching the preferred stock—which intensified scrutiny of its strategy to sell digital assets to meet financial obligations.
4. Utility vs Financial Engineering
Garlinghouse argued that borrowing heavily to accumulate Bitcoin creates market pressure without real utility, contrasting MicroStrategy’s financial engineering with Ripple’s focus on XRP Ledger infrastructure for cross-border payments and aid programs.
