Business

Michael Saylor’s Strategy faces toughest test yet as MSTR slumps

Published

2 days ago

December 3, 2025

Billionaire Michael Saylor has been in tight spots before but nothing like this. The share price of Saylor’s firm, Strategy, which owns over 3% of the world’s Bitcoin, is down dramatically. Worse, the company faces twin headwinds in the form of a bearish crypto market and an impending rule change that will likely trigger a mass selloff of its stock. On Monday, the company announced a $1.2 billion reserve fund to meet impending interest and dividend obligations, but that did little to prop up its shares. All of this fueled fresh attacks from Saylor’s critics who say Strategy’s unusual business model, which revolves around selling stock to buy Bitcoin, is unsustainable or even a Ponzi scheme.

Saylor has ridden out storms in the past. That includes an accounting scandal in 2000 that almost sank one of his previous companies and saw him lose $6 billion of his personal fortune in a day. Saylor’s defenders, meanwhile, dismiss critics as knee-jerk Bitcoin detractors who don’t understand the currency or the corporate finance techniques underlying Strategy’s operations.

Saylor may escape from this bind, as he has in the past, but this time the stakes are higher. In recent years, Strategy’s purchases have helped fuel crypto’s record rise, and turned Saylor into Bitcoin’s leading evangelist. This means any move by Strategy to dump part of its holdings—something its CEO hinted last week could happen—would not only depress prices, but could spark a crisis of confidence and a broader selloff. Meanwhile, a further plunge in Strategy’s share price could not only threaten its future viability, but spur the collapse of dozens of other firms that have copied its business model. The coming months are likely to demonstrate once and for all whether Saylor is a pioneer in crypto finance, as his backers claim, or just another high-stakes gambler whose luck has run out.

A looming $8 billion selloff

The crypto industry likes to hail October as “Uptober,” but this year failed to deliver the customary double-digit price boost. Instead, the month brought one of the biggest wipeouts in the industry’s history, and for Strategy, the month brought an extra helping of bad news when, on Oct. 10, financial giant MSCI proposed a new rule that would exclude it from a series of popular indexes.

This delisting process, which looks set to go into effect in February, would oblige fund managers around the world to shed their holdings of Strategy, and other firms whose assets consist of 50% or more of crypto. In November, JPMorgan warned the rule change could see funds dump $2.3 billion worth of Strategy shares, and that the selloff could climb to over $8 billion if other index compilers followed MSCI’s example.

The market’s growing awareness about MSCI’s plans has already triggered a selloff. Shares of MSTR (the MSTR ticker sign reflects Strategy’s previous name, Microstrategy) are down around 50% since Oct. 1. This has led a key metric known as mNAV, which reflects the value of a crypto company’s shares as a ratio of its Bitcoin holdings, to drop below one on several recent occasions. For a company whose mNAV a year ago reached around 2.45, the current figure underscores how the longtime premium that Strategy shares held over Bitcoin has evaporated.

In response to such a spate of bad news, most CEOs would have issued a series of muted statements asking for patience. But Saylor is not an ordinary CEO and has instead responded by cranking up the number of memes he posts on social media. The memes extol Bitcoin and depict Saylor in AI-generated action hero poses—leading his many acolytes to retweet the memes or post their own version of them.

These meme tactics have served Saylor well in the past, turning Strategy into a momentum play during bull markets. More recently, though, the gimmick has failed to stanch the stock’s downturn, and last month, Saylor posted a rare social media misfire. Seeking to rebut a rumor the company was selling its Bitcoin, Saylor shared an image of himself riding a life preserver in storm-tossed seas as a flaming ocean liner sank behind him. Critics, including Saylor fans, pointed out the meme implied Strategy’s captain was saving himself at a time of trouble rather than going down with his ship.

HODL pic.twitter.com/sQysm4i88t— Michael Saylor (@saylor) November 14, 2025

Regardless of Saylor’s intent, the minor controversy raises questions about whether Strategy will resort to selling its Bitcoin holdings—a move the company has portrayed as unthinkable but, in recent weeks, appears set to accept.

Selling stock to buy Bitcoin

In late November, Strategy acquired 130 Bitcoin, bringing its total hoard to an even 650,000, which is worth around $58.5 billion at early December prices. For context, that amounts to around 3.1% of Bitcoin’s total supply of 21 million (95% of which has been mined), and makes Strategy the biggest holder of the currency save for its creator, Satoshi Nakamoto, whose 1.1 million coins are believed to be gone forever.

According to Saylor, the company has paid an average price of $74,436 per Bitcoin, spending a total of around $48.4 billion, including fees and expenses. In order to pull this off, Strategy has needed a source of capital, and given that Bitcoin does not produce any yield, the company’s go-to technique has been to sell common shares to fund its purchases.

A big upside to this approach is that, unlike debt, common shares do not create any financial obligations for the company. That’s not the case, though, with preferred shares—and Strategy has issued plenty of these as well, which obliges it to pay regular dividends to shareholders. These obligations include payments of roughly $200 million that are due by Dec. 31, the bulk of which are owed in the form of dividends (Strategy, like most companies, also carries some debt).

In order to project a sense of financial stability, Strategy took the unusual step in early December of creating a so-called dollar reserve of $1.4 billion that Saylor says will be enough to cover the next 21 months of dividend obligations.

Saylor announced the reserve fund at a Dec. 1 investor presentation where he added, with his usual bravado: “It’s our intention to keep stacking Bitcoin.” In the near future, though, that goal is likely to be aspirational and Strategy may instead find itself selling Bitcoin instead.

“We can sell Bitcoin and we would sell Bitcoin if we needed to fund our dividend payments below 1x mNAV,” Strategy CEO Phong Le said on a podcast last Friday. It was a remarkable statement from a company that is premised on the value of Bitcoin always increasing. More remarkable was when Saylor, who frequently exhorts the popular hold-on-to-your-Bitcoin phrase “HODL,” repeated on Monday that Strategy could sell some Bitcoin.

On Tuesday, Strategy CFO Andrew Kang qualified the statement by saying the company planned to sell Bitcoin as a last resort and only if mNAV stays below one for a “very extended period.”

Whatever the specifics, Strategy’s acknowledgment it could sell Bitcoin combined with the new dollar reserve fund has sparked a new wave of vitriol from Strategy critics. Those include Peter Schiff, an advocate for the gold industry and longtime crypto critic, who claims the company is coming undone, and that Saylor is the “biggest con man” on Wall Street.

Today is the beginning of the end of $MSTR. Saylor was forced to sell stock not to buy Bitcoin, but to buy U.S. dollars merely to fund MSTR’s interest and dividend obligations. The stock is broken. The business model is a fraud, and @Saylor is the biggest con man on Wall Street.— Peter Schiff (@PeterSchiff) December 1, 2025

If Schiff’s view—hardly a consensus one—is correct and Strategy has to liquidate, then the broader crypto market could be hit hard since the selloff would almost certainly trigger a downward price spiral for Bitcoin. Even if Strategy has to sell only a portion of its holdings, it could trigger a contagion in which hundreds of other so-called digital asset treasuries (DATs) do the same.

But even as skeptics label Strategy and the DAT model as a house of cards built on financial chicanery, others view them as early leaders in an emerging category of crypto banks.

‘All the bad news is out there’

Whatever one thinks of Saylor, there is no denying he is a natural showman. In his Dec. 1 presentation announcing the new U.S. dollar reserve, he displayed a futuristic-looking spaceship in garish green and orange with a Bitcoin powered reactor at its core. “Think of [the dollar reserve] as a $USD battery. We’re basically using a nuclear reactor to spin a generator to charge a battery,” explained Saylor.

Courtesy of Strategy

For Saylor’s detractors, all of this smacks of the worst type of hucksterism. Others see a visionary who is using compelling metaphors and imagery to help the public understand a complex new financial mechanism.

The latter include Sebastian Bea, a former longtime BlackRock executive and Olympic rower, who is now president of a digital asset treasury called ReserveOne. According to Bea, Saylor is pursuing a sophisticated long-term strategy, and has surrounded himself with a team of corporate finance experts, including board member Peter Briger, who has had a distinguished career at Goldman Sachs and Fortress Investment Group.

In this context, Saylor’s plans to purchase a growing supply of Bitcoin by tapping into capital markets for equity, commodities, and derivatives makes sense. As he and Strategy’s CFO explained this week, that plan includes bringing in revenue by lending Bitcoin and selling covered call options.

For all of this to work, though, the value of Bitcoin will have to keep appreciating. This notion strikes crypto skeptics as absurd, but crypto advocates point out correctly that Bitcoin has grown faster than nearly any other asset over the past decade, and is poised for longer-term gains as large entities ranging from sovereign wealth funds to university endowments add it to their portfolios. In the latest bullish signal, Vanguard—which has refused to add crypto to its portfolio for years—elected to add Bitcoin and other crypto ETFs this week.

If Bitcoin does keep appreciating, Strategy will be able to keep obtaining credit against the surplus value in the same way a company can do with real estate in a desirable market. There will of course be downturns but, according to Bea, Strategy “has planned for this” and has a healthy overall asset to debt ratio.

Bea adds that the recent wave of digital asset treasury companies are akin to a new type of bank, and that their model is evolving rapidly. He points out that some, including ReserveOne, are based around cryptocurrencies like Ethereum that do provide yield unlike Bitcoin, which provides additional breathing room on the corporate finance front. Bea acknowledged that the impending move by MSCI to exclude DATs from indexes could be a significant headwind, and said that companies based around crypto holdings need time to evolve.

Cosmo Jiang, a partner at the crypto-focused venture capital firm Pantera, likewise believes that digital asset treasuries—including a Solana-focused company he is backing—will become a permanent feature of the financial landscape.

“We’re seeing the genesis of a whole new category of business,” Jiang told Fortune, adding that DATs are poised to earn significant revenue from the fast-growing world of decentralized finance.

In separate remarks to Bloomberg, Jiang made the case that the sector is currently at a low point, but that the current malaise around Strategy and similar firms is temporary. “We’re at the point where all the bad news is out there, and the bears are the loudest voices in the room.”

Jiang noted, however, that many in the recent wave of crypto-hoarding companies are unlikely to survive, and that the business model required not just a stash of tokens, but deep experience in capital markets and corporate finance.

“There will be two or three large winners” for each major cryptocurrency, he predicted. If this is the case, the coming months will likely determine whether one of those is Strategy.

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Business

Trump wants more health savings accounts. A catch: they can’t pay insurance premiums

Published

17 minutes ago

December 5, 2025

Jace Porter

With the tax-free money in a health savings account, a person can pay for eyeglasses or medical exams, as well as a $1,700 baby bassinet or a $300 online parenting workshop.

Those same dollars can’t be used, though, to pay for most baby formulas, toothbrushes — or insurance premiums.

President Donald Trump and some Republicans are pitching the accounts as an alternative to expiring enhanced federal subsidies that have lowered insurance premium payments for most Americans with Affordable Care Act coverage. But legal limits on how HSAs can and can’t be used are prompting doubts that expanding their use would benefit the predominantly low-income people who rely on ACA plans.

The Republican proposals come on the heels of a White House-led change to extend HSA eligibility to more ACA enrollees. One group that would almost certainly benefit: a slew of companies selling expensive wellness items that can be purchased with tax-free dollars from the accounts.

There is also deep skepticism, even among conservatives who support the proposals, that the federal government can pull off such a major policy shift in just a few weeks. The enhanced ACA subsidies expire at the end of the year, and Republicans are still debating among themselves whether to simply extend them.

“The plans have been designed. The premiums have been set. Many people have already enrolled and made their selections,” Douglas Holtz-Eakin, the president of the American Action Forum, a conservative think tank, warned senators on Nov. 19. “There’s very little that this Congress can do to change the outlook.”

Cassidy’s Plan

With health savings accounts, people who pay high out-of-pocket costs for health insurance are able to set aside money, without paying taxes, for medical expenses.

For decades, Republicans have promoted these accounts as a way for people to save money for major or emergent medical expenses without spending more federal tax dollars on health care.

The latest GOP proposals would build on a change included in Republicans’ One Big Beautiful Bill Act, which makes millions more ACA enrollees eligible for health savings accounts. Starting Jan. 1, those enrolled in Obamacare’s cheapest coverage may open and contribute to HSAs.

Now Republicans are making the case that, in lieu of the pandemic-era enhanced ACA subsidies, patients would be better off being given money to cover some health costs — specifically through deposits to HSAs.

The White House has yet to release a formal proposal, though early reports suggested it could include HSA contributions as well as temporary, more restrictive premium subsidies.

Sen. Bill Cassidy — a Louisiana Republican who chairs the Senate Health, Education, Labor, and Pensions Committee and is facing a potentially tough reelection fight next year — has proposed loading HSAs with federal dollars sent directly to some ACA enrollees.

“The American people want something to pass, so let’s find something to pass,” Cassidy said on Dec. 3, pitching his plan for HSAs again. “Let’s give power to the patient, not profit to the insurance company.”

He has promised a deal can be struck in time for 2026 coverage.

Democrats, whose support Republicans will likely need to pass any health care measure, have widely panned the GOP’s ideas. They are calling instead for an extension of the enhanced subsidies to control premium costs for most of the nearly 24 million Americans enrolled in the ACA marketplace, a larger pool than the 7.3 million people the Trump administration estimates soon will be eligible for HSAs.

HSAs “can be a useful tool for very wealthy people,” said Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee. “But I don’t see it as a comprehensive health insurance opportunity.”

Who Can Use HSAs?

The IRS sets restrictions on the use of HSAs, which are typically managed by banks or health insurance companies. For starters, on the ACA marketplace, they are available only to those with the highest-deductible health insurance plans — the bronze and catastrophic plans.

There are limits on how much can be deposited into an account each year. In 2026 it will be $4,400 for a single person and $8,750 for a family.

Flexible spending accounts, or FSAs — which are typically offered through employer coverage — work similarly but have lower savings limits and cannot be rolled over from year to year.

The law that established HSAs prohibits the accounts from being used to pay insurance premiums, meaning that without an overhaul, the GOP’s proposals are unlikely to alleviate the problem at hand: skyrocketing premium payments. Obamacare enrollees who receive subsidies are projected to pay 114% more out-of-pocket for their premiums next year on average, absent congressional action.

Even with the promise of the government depositing cash into an HSA, people may still opt to go without coverage next year once they see those premium costs, said Tom Buchmueller, an economics professor at the University of Michigan who worked in the Biden administration.

“For people who stay in the marketplace, they’re going to be paying a lot more money every month,” he said. “It doesn’t help them pay that monthly premium.”

Others, Buchmueller noted, might be pushed into skimpier insurance coverage. Obamacare bronze plans come with the highest out-of-pocket costs.

An HHS Official’s Interest

Health savings accounts can be used to pay for many routine medical supplies and services, such as medical and dental exams, as well as emergency room visits. In recent years, the government has expanded the list of applicable purchases to include over-the-counter products such as Tylenol and tampons.

Purchases for “general health” are not permissible, such as fees for dance or swim lessons. Food, gym memberships, or supplements are not allowed unless prescribed by a doctor for a medical condition or need.

Americans are investing more into these accounts as their insurance deductibles rise, according to Morningstar. The investment research firm found that assets in HSAs grew from $5 billion 20 years ago to $146 billion last year. President George W. Bush signed the law establishing health savings accounts in 2003, with the White House promising at the time that they would “help more American families get the health care they need at a price they can afford.”

Since then, the accounts have become most common for wealthier, white Americans who are healthy and have employer-sponsored health insurance, according to a report released by the nonpartisan Government Accountability Office in September.

Now, even more money is expected to flow into these accounts, because of the One Big Beautiful Bill Act. Companies are taking notice of the growing market for HSA-approved products, with major retailers such as Amazon, Walmart, and Target developing online storefronts dedicated to devices, medications, and supplies eligible to be purchased with money in the accounts.

Startups have popped up in recent years dedicated to helping people get quick approval from medical providers for various — and sometimes expensive — items, memberships, or fitness or health services.

Truemed — a company co-founded in 2022 by Calley Means, a close ally of Health and Human Services Secretary Robert F. Kennedy Jr. — has emerged as one of the biggest players in this niche space.

A $9,000 red cedar ice bath and a $2,000 hemlock sauna, for example, are available for purchase with HSA funds through Truemed. So, too, is the $1,700 bassinet, designed to automatically respond to the cries of a newborn by gently rocking the baby back to sleep.

Truemed’s executives say its most popular products are its smaller-dollar fitness offerings, which include kettlebells, supplements, treadmills, and gym memberships.

“What we’ve seen at Truemed is that, when given the choice, Americans choose to invest their health care dollars in these kinds of proven lifestyle interventions,” Truemed CEO Justin Mares told KFF Health News.

Means joined the Department of Health and Human Services in November after a stint earlier this year at the White House, where he worked when Trump signed the One Big Beautiful Bill Act into law in July. Truemed’s general counsel, Joe Vladeck, said Means left the company in August.

Asked about Means’ potential to benefit from the law’s expansion of HSAs, HHS spokeswoman Emily Hilliard said in a statement that “Calley Means will not personally benefit financially from this proposal as he will be divesting from his company since he has been hired at HHS as a senior advisor supporting food and nutrition policy.”

Truemed is privately held, not publicly traded, and details of how Means will go about divesting have not been disclosed.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.

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Business

Netflix lines up $59 billion of debt for Warner Bros. deal

Published

48 minutes ago

December 5, 2025

Jace Porter

Netflix Inc. has lined up $59 billion of financing from Wall Street banks to help support its planned acquisition of Warner Bros. Discovery Inc., which would make it one of the largest ever loans of its kind.

Wells Fargo & Co., BNP Paribas SA and HSBC Plc are providing the unsecured bridge loan, according to a statement Friday, a type of financing that is typically replaced with more permanent debt such as corporate bonds.

Under the deal announced Friday, Warner Bros. shareholders will receive $27.75 a share in cash and stock in Netflix. The total equity value of the deal is $72 billion, while the enterprise value of the deal is about $82.7 billion.

Bridge loans are a crucial step for banks in building relationships with companies to win higher-paying mandates down the road.

A loan of $59 billion would rank among the biggest of its type, Anheuser-Busch InBev SA obtained $75 billion of loans to back its acquisition of SABMiller Plc in 2015, the largest ever bridge financing, according to data compiled by Bloomberg.

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Business

Stocks: Facing a vast wave of incoming liquidity, the S&P 500 prepares to surf to a new record high

Published

1 hour ago

December 5, 2025

Jace Porter

The S&P 500 index ticked up 0.3% yesterday, its eighth straight upward trading session. It is now less than half a percentage point away from its record high, and futures were pointing marginally up again this morning. Nasdaq 100 futures were even more optimistic, up 0.39% before the open in New York. The VIX “fear” index (which measures volatility) has sunk 12.6% this month, indicating that investors seem to have settled in for a calm, quiet, risk-on holiday season.

They have reason to be happy. Washington is preparing a wave of incoming liquidity that is likely to generate fresh demand for equities.

For instance, the CME FedWatch index shows an 87% chance that the U.S. Federal Reserve will deliver an interest rate cut next week, delivering a new round of cheaper money. Further cuts are expected in 2026.

Furthermore, Wall Street largely expects President Trump to announce that Kevin Hassett will replace Fed chairman Jerome Powell in May—and Hassett is widely regarded as a dove who will lean in favor of further rate cuts.

Elsewhere, the Fed has begun a series of “reserve management purchases,” a program in which the central bank will buy short-term T-bills—a move that will add more liquidity to markets generally.

Banks, brokers and trading platforms are also lining up to handle ‘Trump Accounts,’ into which the U.S. government will deposit $1,000 for every child. The trust fund can be invested in low-cost stock index trackers—a new source of investment demand coming online in the back half of 2026.

So it’s no surprise that nine major investment banks polled by the Financial Times expect stocks to rise in 2026; the average of their estimates is by 10%.

The Congressional Budget Office also estimates that the One Big Beautiful Bill Act will add 0.9% to U.S. GDP next year largely because it allows companies to immediately deduct capital expenditures from their taxes—spurring a huge round of corporate spending.

With all that fresh money on the horizon, it’s clear why markets have shrugged off their worries about AI and Bitcoin. The only shock will be if the S&P fails to hit a new all-time high by the end of the year.

Here’s a snapshot of the markets ahead of the opening bell in New York this morning: