Michael Saylor Suggests MicroStrategy Will Never Sell Its Bitcoin

The plunging price of bitcoin raised questions about whether the company might soon receive a margin call from its lenders.

May 10, 2022 at 1:21 p.m. UTC
Updated May 10, 2022 at 7:58 p.m. UTC

Jamie Crawley is a CoinDesk news reporter based in London.

Founder and CEO of business-intelligence software firm MicroStrategy (MSTR) Michael Saylor took to Twitter on Tuesday morning in an attempt to clarify the company's obligations with respect to its bitcoin-backed loans.

"MicroStrategy has a $205 million term loan and needs to maintain $410 million as collateral," said Saylor. Linking to his company's Q1 investor presentation, Saylor noted that of MicroStrategy's 129,218 bitcoin (BTC) stash, 115,109 (or more than $3 billion at current prices) remains unencumbered.

Bitcoin would need to fall all the way to $3,562 before the company would run out of enough of the crypto to pledge for that loan, but even at that point, MicroStrategy could post some other collateral, said Saylor. His implication is that theoretically there's almost no price low enough at which his firm would need to be a forced seller of bitcoin.

The sharp downturn in the crypto market – which last night saw bitcoin fall below $30,000 for the first time since July 2021 – had ramped up chatter about MicroStrategy facing a margin call. Indeed, on the company earnings call last week, outgoing CFO Phong Le said as much, suggesting about $21,000 as a trigger point.

The Saylor tweet and presentation slides appear to make clear, however, that the company for now has an overwhelming amount of unencumbered bitcoin available as additional collateral.

MicroStrategy shares tumbled nearly 26% yesterday alongside bitcoin's plunge. Both are modestly bouncing this morning, with MSTR ahead 6.4% and bitcoin returning to the $32,000 level.

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Jamie Crawley is a CoinDesk news reporter based in London.

Jamie Crawley is a CoinDesk news reporter based in London.

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