Bankless · Wednesday, July 1, 2026
Jeff Dorman discusses the potential fate of MicroStrategy's 'Stretch' preferreds, likening them to a 'melting ice cube' scenario. He explains that while bankruptcy is unlikely, the preferreds could languish at a low value if dividends are eventually cut, a move he sees as the most probable long-term outcome.
“The worst outcome is they stop paying the dividend. But there's no triggers to force them to do anything. And it just languishes at 30 or 40 cents on the dollar forever, which is most likely what will happen eventually? Right. So so, again, it's sort of most likely case for a stretch. Not necessarily today, but eventually for sure.”
“I mean, it's just you already have a billion seven of cash dividends that that that's probably growing over time, as we said, with higher interest expense on the debt that they're going to have to roll. Plus, who knows if they come up with other things, but. It's just not feasible to pay that every year in a business that generates no cash flow.”
“So at some point, the most likely probability at some point is that they come out and say, we now own all of the Bitcoin that we ever wanted to own. Let's say it's a 5% or some magic threshold. we own 5% of all outstanding Bitcoin. We never want to buy any more ever again. We're now just going to sit there and wait for Bitcoin to go higher like it should. And therefore, there makes no sense for us to pay the dividends anymore because what do we care?”