The former Arsenal captain stated that allowing Cesc Fabregas, Samir Nasri, Van Persie and others leave the Emirates, had given the footballing world a bad impression about the club.
"It sends out all the wrong messages for me, being a selling club," he told the London Evening Standard .
"Piece by piece for seven years, it chips away at your credibility. Selling your best players is part of that.
"I very much see Arsenal as the biggest club in the world, so I can't understand why anybody would want to play anywhere else - but I can understand it was very different for me.
"I am looking at it not as an ex-player or pundit, but as a fan and giving what the fans are thinking and feeling."
Arsenal had started the new season on a good note, remaining unbeaten on all fronts but Adams insists the club and players lacks mentality towards success and as a result of that gives Arsenal no hope of winning the Champions League.
"The problem for me in the last seven years is the defensive vulnerabilities as a team - the goalkeeper, the back four, even the central midfield players, the mentality of the team," he added.
"I don't think they are a team that are set up to do what Chelsea did last year in the Champions League and I don't think Arsene wants to.
“Year in, year out the team with thebest defence wins the league and we saw the team with the best defence win the Champions League,so it makes you wonder why a lot of teams aren't focusing more on defending."
Arsenal kickstarted their Champions League campaign with a 2 1 win over Ligue 1 reigning Champions, Montpellier but the Arsenal legend said the club cannot go far in the competition.
"I expect them to score goals, but they cannot win the Champions League with their current mentality," he said.
"I hope they prove me wrong, but against the better teams I think they will fall short again. I am not alone here - I think most of the Arsenal fans would agree with me.
"To actually think you are going to play Barcelona or Real Madrid off the pitch...I don't think this team are good enough to do that."