The Wall Street Journal’s Markets A.M. newsletter on Monday cast Michael Saylor’s Strategy—the former MicroStrategy, now a bitcoin holding vessel—alongside Walt Disney and Steve Jobs as the latest chapter in a great American tradition of audacious founders, and in doing so the Journal handed us the cleanest exhibit yet of what our financialized economy now calls vision. Strategy has shed roughly ninety billion dollars in market value since last July, its perpetual preferred stock trades at a yield only distressed debt commands, and the structure underneath it all is not complicated. It is not even new. It is a casino dressed in the language of a balance sheet, and the Journal’s own numbers confess it before the headline gets rewritten: ten billion dollars in variable-rate perpetual preferred stock sold in under a year, a dividend coupon hiked seven times to eleven and a half percent, a security that has fallen to eighty-two dollars and trades like junk, a business that “produces hardly any of its own cash,” and the grim admission tucked into the fifth paragraph that “owners essentially are being paid with new investors’ money—a situation that can’t continue.” That is not a founding wager. It is a pyramid, and the pharaoh at the top is printing new bricks as fast as he can sell them.
Here is how the spiral runs, step by step, and it is not subtle. One: Strategy pays Stretch’s dividends from new investors’ money, not from revenue the business earns. Two: when the preferred share price falls below its hundred-dollar par, the company must raise the yield to attract fresh capital. Three: a higher yield means a larger cash drain the company cannot cover from operations. Four: to plug the gap, Strategy sells bitcoin—as it did earlier this month for the first time since 2022—which depresses the price of the very asset the whole scheme depends on, or it sells more common stock, diluting shareholders already down three-fourths from their peak, or it raises the dividend again, deepening the deficit further. Five: each step feeds the next, and the circle tightens. The dividend now stands at eleven and a half percent, raised seven times in less than a year. Strategy generates almost no cash of its own to cover it. Selling bitcoin to pay the dividend on the bitcoin you borrowed against is not management. It is a confession: the perpetual-motion machine already needs outside fuel, and the fuel is the coin itself.
Give Saylor’s defenders their strongest point. They will tell you that bitcoin is a superior store of value, that Strategy is simply the most efficient vehicle for gaining exposure, and that the Stretch preferred stock is an innovative tool for committed long-term believers who want income while riding the digital gold wave. Fair enough. Every bull market needs its high priest, and bitcoin’s rally has made true believers of many who once dismissed it as a libertarian fantasy. That is not the objection.
The objection is that the structure collapses the moment new investors stop showing up, and that the structure exists precisely because there is no productive engine underneath it. Walt Disney made a film. Steve Jobs made devices that people line up to buy. Fred Smith built a network that moves real packages through the real world. What did Saylor build? He converted a working software company into a holding vehicle for an asset that produces no yield, earns no revenue, and generates no cash flow—worth only what the next buyer will pay. Then he sold the risk to ordinary investors through a security most of them do not understand, wrapped in advertisements of women living off dividends on exotic beaches. Ninety billion dollars is roughly the market capitalization of a company that employs tens of thousands of people and moves actual grain to actual processors, year after year, rain or drought. Strategy’s version left no factory standing, no fields planted, no shipments moved, no workers employed in producing anything real. Just a ticker, a preferred stock trading like distressed debt, and a man who once crashed a company ninety-nine percent and somehow convinced people to line up again.
I traded agricultural futures on a Chicago desk before I came home to run the co-op, and I know the difference between speculation tethered to the real and speculation tethered to nothing. The futures contract on corn was speculative—you could bet on corn you never intended to take delivery of—but it was tied, at least distantly, to a real crop in a real field. The farmer still had to plant. The rain still had to fall. The corn still had to move by rail to the processor. The abstraction bent toward reality eventually, even on the trading desk. Saylor’s structure bends toward nothing. It is pure belief leveraged against pure belief, sold to people who saw an ad and believed still more—a carry trade that works until the music stops. I watched men run that game. I know what it looks like from the inside. The Journal calls it “frenetic buying.” I call it a zero-sum tournament where the only question is who can sell their bitcoin to the next guy first, and the preferred stock layers a second tournament on top of the first.
The conservative movement spent decades telling working people that their savings would be safe in the market, that ownership was the path to dignity, that capital formation was the engine of American prosperity. And look what the market built. A company that produces nothing, employs almost no one in productive labor, and has vaporized roughly ninety billion dollars in eleven months—not because a factory burned or a crop failed, but because the air came out of a speculation. The grammar of a conservative who remembers when a stock certificate represented a claim on real assets—a railroad, a mill, a cooperative—is not the grammar of a man who mistook bitcoin for tulips. It is the grammar of a man who watches a ninety-billion-dollar hole in the market be excused as the cost of innovation and asks, conserve what, exactly?
The concrete counter-model is not far from my desk. The co-op where I work pays a dividend too. It comes at the end of the year, in cash, to members who sold their grain through us. The check is small. It does not promise a woman on a beach. It comes from the difference between what we paid for the corn and what the market paid us, after the bills were covered. No one gets rich. The money was earned, not engineered. Adams-Columbia Electric Cooperative sells electricity to its members, who also own it. It has never issued a variable-rate perpetual preferred stock and its store of value is the power lines that keep the lights on. The credit union down the road makes loans to farmers who grow actual potatoes, not digital ones. These institutions are boring. They will never make their shareholders rich overnight, and they will never lose ninety billion dollars in market value. They are what a real economy looks like. That used to be what the right meant by capital formation. Now it means a man with a Twitter feed and a bitcoin ticker, selling preferred stock at fourteen percent to ordinary people who saw an ad, and the Wall Street Journal comparing him to the man who drew Mickey Mouse.