MicroStrategy Will ‘HODL Through Adversity’ And It’s Not In Danger Of Going Bankrupt
MicroStrategy Will ‘HODL Through Adversity’ And It Is Not In Danger Of Going Bankrupt
Michael Saylor has said publicly that MicroStrategy is not in risk of being liquidated due to the recent market collapse. His allegation appears to be supported by the company’s financial filings.
Despite the current Bitcoin crisis, Michael Saylor says that MicroStrategy is not in danger of going bankrupt.
He retweeted a post from May 10 detailing the company’s financial status today. The company stated in the initial article that it would only face liquidation on a $205 million loan it got to acquire Bitcoin if the value fell below $3,562. Even if it fell below $3,562, Saylor said on May 10 that MicroStrategy “could post some other collateral” to prevent liquidation.
After plummeting to its lowest level since December 2020, Bitcoin has had a rocky week. It’s presently worth about $22,500.
Saylor highlighted that MicroStrategy is taking a long-term approach to its Bitcoin holdings in reaction to market volatility.
MicroStrategy is the United States’ biggest independent publicly listed business intelligence company. In August 2020, the company began investing in Bitcoin as a treasury reserve asset, citing a sinking dollar and global macroeconomic conditions as reasons.
According to the company’s First Quarter 2022 Financial Results report, as of March 31, 2022, it possessed a total of 129,218 Bitcoin worth $2.9 billion at today’s values. Its average purchase price is roughly $30,700, implying that Bitcoin would have to fall another 27% for the business to lose money on paper.
Other records suggest that MicroStrategy offered 19,466 Bitcoin from its hoard to Silvergate Bank as security for a $205 million loan to expand its Bitcoin holdings. At the time, the collateral was worth $820 million; at today’s rates, it’s worth around $440 million. MicroStrategy still has over $2.1 billion in Bitcoin to offer as collateral, with 95,643 Bitcoin remaining unencumbered.
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