Peter Schiff Calls Strategy’s Stretch Preferred Stock a ‘Classic Ponzi Scheme’

JOON HYOUNG LEE

Summary

Peter Schiff criticized Strategy’s perpetual preferred stock Stretch, calling it a "blatant Ponzi scheme."
Strategy raised $2.18 billion of the funding for last week’s $2.54 billion Bitcoin purchase by selling Stretch.
Strategy is pursuing a plan to change Stretch dividend payments, which carry an 11.5%% annual dividend rate, to twice a month from once a month.

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Peter Schiff, chief economist at Euro Pacific Capital and a longtime Bitcoin skeptic, criticized Strategy’s perpetual preferred stock.

On X on April 23, Schiff wrote that Stretch was "such an obvious Ponzi scheme." Stretch is a perpetual preferred stock that Strategy, the world’s largest corporate Bitcoin treasury company, issued in July last year to help fund Bitcoin purchases.

Stretch has already become a key funding source for the company. Strategy bought $2.54 billion of Bitcoin last week, and $2.18 billion of the total came from selling Stretch.

Strategy is also pursuing a plan to change Stretch’s dividend payment schedule to twice a month from once a month. Stretch currently offers an annual dividend rate of 11.5%, and the company pays the dividend in cash each month.

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