S&P Global Assigns Strategy Inc. a B- Credit Rating
S&P Global Ratings gave Michael Saylor’s Strategy Inc. a B- credit rating. This rating places the Bitcoin-treasury firm in speculative, non-investment-grade territory, often called “junk bond” status. The outlook for the rating is stable.
Despite the low rating, Strategy’s stock (ticker: MSTR) increased by 2.27% on Monday to $295.63, according to Google Finance. This shows that investors remain confident in the company’s long-term Bitcoin strategy.
S&P Notes High Bitcoin Exposure and Low Liquidity
S&P justified the B- rating due to Strategy’s heavy reliance on Bitcoin and limited business diversification. The agency also highlighted low liquidity in U.S. dollars as a concern.
- S&P said, “We view Strategy’s high bitcoin concentration, narrow business focus, weak risk-adjusted capitalization, and low U.S. dollar liquidity as weaknesses.”
- Strategy currently holds about 640,808 BTC, mostly purchased through equity and debt financing.
- The stable outlook assumes that the company will manage its debt and preferred stock obligations well.
S&P warned that a sharp decline in Bitcoin’s price could harm Strategy’s balance sheet. This might force the company to sell Bitcoin at low prices.
Mixed Analyst Reactions to the Rating
Not all experts agree with S&P’s assessment. Crypto analyst Adam Livingston called the B- rating “hilarious.” He said it shows a lack of understanding of Bitcoin-based capital models by traditional finance.
Livingston argued that blockchain-based holdings provide transparency and stability that traditional metrics do not capture.
Matthew Sigel from VanEck noted that the B- rating implies about a 15% default risk over five years. However, he pointed out that Strategy has less debt and higher liquidity than many companies with similar ratings, such as some airlines and automakers.
Outlook and Future Prospects for Strategy
S&P said that an upgrade is unlikely within the next year unless Strategy improves its U.S. dollar liquidity and reduces debt exposure. Despite the rating, Michael Saylor presented it positively as a sign that traditional finance is recognizing the Bitcoin treasury model.
For investors, Strategy remains a high-risk but pioneering company betting on Bitcoin’s role in corporate finance.
