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Microstrategy, the company’s largest car holder in Bitcoin, embodied the betting of the most daring institutions on the encrypted currency. Participant founder and President Michael Sailor fixed in Bitcoin The company’s strategy identified For years. However, this strategy is now facing a challenge after the last SEC file has been delivered to the possibility of microstrategy to liquidate some bitcoin holdings under financial pressure and The last bitcoin price collapse. It may exceed the effects of the company’s public budget and affect the broader bitcoin market.
Rising debts, negative cash flow, and Laibenkin line
Microstrategy revealed many important financial weaknesses In modern form 8-k Foot with a second. At the time of deposit, the company I mentioned a contract 528,185 BTC, which was obtained with a purchase rate of $ 67,458 per bitcoin, compared to the total cost of about 35.63 billion dollars. However, despite the huge size of the Bitcoin Treasury, Microstrategy admitted that its basic institution’s programs did not generate a positive operational cash flow. Company As it indicates 8.22 billion dollars in debt and face an annual contract interest burden of $ 35.1 million.
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Although it issued more than $ 1.6 billion in favorite stocks linked to the obligations of a large annual profit of $ 146.2 million, these obligations are not fulfilled. Instead, Microstrategy explicitly made it clear that she expects to rely on debt or finance stocks to meet their obligations, and those efforts may become tense if the Bitcoin price decreases sharply. The report warns that if the market value of its passports decreases significantly, it may negatively affect the company’s ability to raise funds. In such a situation, the company may have to sell bitcoin at a confusion.
At a time when the report was submitted, BTC was trading only 13 % higher than the average company purchase price. Because Bitcoin is the majority of the assets of Microstrategy, its public budget is closely related to the encryption price. As such, the decline without this level can create a series of decrease in stock prices and eventually forced to sell pressure even on the bitcoin price itself.
Michael Sailor’s response: Stay in the course
Michael Sailor, co -founder of Microstrategy and former CEO, is one of Bitcoin’s largest supporter It was influencing the company’s adoption of the Bitcoin Strategy. Moving to the social media platform X after the report of the report, Silor simply Tweet: “Hodl”, a famous talisman between the encryption trees that indicate a long -term conviction.
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The publication had more than 1.4 million views on the platform and resonated with many of the bossy supporters, as shown in the Comments section. Follow that With another tweet: “Bitcoin is the best idea. There is no best.”
At the time of writing this report, BTC is trading at $ 81,900, 6 % in The past 24 hours. Even if Microstrategy sells any bitcoin coins at this stage, it will not be the first sale of their passports. Again on December 22, 2022, Microstrategy 704 BTC sold for $ 11.8 million under similar circumstances.
Distinctive image from Unsplash, Chart from TradingView.com
