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Renowned investor Ross Gerber made a thinly veiled jibe at Strategy Inc.'s (NASDAQ:MSTR) model of holding Bitcoin (CRYPTO: BTC) on Tuesday, proposing a similar company focused on purchasing and storing gold.
Gerber sarcastically pitched opening a public company that buys gold. Investors could then buy shares in this company at a “1.5x premium” to the value of gold it owns, he added, alluding to Strategy shares, which trade at a premium to the firm’s net Bitcoin value.
“You can pay 1.5x the gold I own because the business of buying gold is so special it deserves a premium… or maybe it should be a discount… as this actually costs money and destroys value,” the CEO of Gerber Kawasaki Wealth and Investment Management said.
Gerber argued that gold and Bitcoin “are fine as they are,” suggesting that the model of having leveraged exposure is not viable.
See Also: Peter Schiff Says Michael Saylor Strategy-Bitcoin Model Is ‘Fraud’ And MSTR Is ‘Broken’
Gerber’s concerns mirrored those of economist Peter Schiff, who accused Strategy of operating an unsustainable business model.
Notably, the Michael Saylor-led company announced a $1.44 billion buffer earlier in the week to cover dividends and interest without relying on Bitcoin sales during downturns.
Saylor also admitted that the company could sell its Bitcoin if shares start trading at a discount to underlying BTC holdings. The company currently holds 650,000 BTC at an average price of $74,436.
However, according to market expert and media personality Jim Cramer, Saylor may be attempting to “engineer a squeeze of a lifetime” by doing the reverse of what he suggests.
Saylor previously claimed that Strategy is “engineered” to endure an 80 to 90% drawdown and continue operating, describing its capital structure as "extremely robust."
Price Action: At the time of writing, BTC was exchanging hands at $$92,962.55, up 6.87% in the last 24 hours, according to data from Benzinga Pro.
Strategy shares rose 0.31% in after-hours trading to $181.90. The stock closed 5.78% higher at $181.33 during Tuesday’s regular trading session.
The stock maintains a weaker price trend over the short, medium and long terms. How does it compare with other Bitcoin treasury companies, such as American Bitcoin Corp. (NASDAQ:ABTC)? Visit Benzinga Edge Stock Rankings to find out.
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