Vinny Lingham, co-founder of Praxos Capital, told Unchained’s Laura Shin that Strategy’s financial structure is now unraveling in a way he predicted 18 months ago, and that the company may be approaching the point where every available move makes its position worse.
Key Takeaways:
Vinny Lingham predicted in October 2024 that Saylor would damage bitcoin more than FTX, with MSTR now down over 80%.Strategy holds $6.7B in convertible notes; Shin cites an analyst who estimates covering early maturities requires selling up to 74,000 BTC or more.Lingham says STRC, trading under $76, will never return to $100 par, and that Strategy’s cash runway is limited.He added:
“At the time, it was a very unpopular prediction. Now, 18 months later, people are starting to wonder whether I was actually right.”
The ‘Saylor Scheme’Lingham stops short of calling Strategy a Ponzi scheme, but he has coined his own term for what Saylor built.
“He’s built an extremely complex capital structure consisting of debt and multiple layers of preferred securities,” Lingham argued “I jokingly call it a ‘Saylor scheme.’ He issued STRC, STRD, STRK … and several others. When one offering stopped working, he simply introduced another.”
STRC, one of the preferred share classes at the center of recent market concern, closed today at $75.69, after falling under $74 earlier this week. Lingham does not expect it to recover.
“I don’t believe STRC ever returns to $100,” he said. “I’d bet it never trades back at par again.”
The Chess EndgameStrategy recently raised $335 million, selling 2.7 million shares of common stock and using roughly $300 million to build its cash reserves to approximately $1.4 billion. That cash is expected to cover preferred dividend obligations for about 10 months. In Lingham’s view, the market responded by continuing to sell both MSTR and STRC.
Lingham says the company’s recent move to bimonthly dividend payments made the situation worse. More frequent payment cycles mean management has less time to respond when conditions deteriorate, and each cycle tightens the pressure on cash reserves.
He describes Saylor’s current position using a term from chess.
“Michael is now in what’s known in chess as zugzwang,” Lingham said. “Every move available to him is a losing move. If he raises the dividend yield, he shortens his cash runway. If he issues more shares, he dilutes common shareholders further.”
The $6.7 Billion Debt ProblemLingham responded to Shin’s summary of Walsh’s X post and insisted that the market is already pricing that risk in.
The Reflexive Loop in ReverseHe added that Strategy’s mNAV sitting around 1.06 is historically a level at which similar investment vehicles trade to a discount. He said a value closer to 0.90 would make more sense given the circumstances.
What Comes Next“I don’t think he’ll admit that the strategy needs to change,” Lingham said. “I think hubris plays a significant role here.”
