MicroStrategy Could Be Forced To Dump Bitcoin Under These Circumstances, Michael Saylor Responds
The post MicroStrategy Could Be Forced To Dump Bitcoin Under These Circumstances, Michael Saylor Responds appeared on BitcoinEthereumNews.com.
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing Strict editorial policy that focuses on accuracy, relevance, and impartiality Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. Este artículo también está disponible en español. MicroStrategy, the largest corporate holder of Bitcoin, has long embodied the boldest institutional bet on the cryptocurrency. Co-founder and chairman Michael Saylor’s unwavering belief in Bitcoin has defined the company’s strategy for years. However, that strategy now faces a challenge after a recent SEC filing hinted at the possibility of MicroStrategy being forced to liquidate some of its Bitcoin holdings under financial pressure and the recent Bitcoin price crash. The implications could ripple beyond the company’s balance sheet and affect Bitcoin’s broader market. Mounting Debt, Negative Cash Flow, And The Bitcoin Lifeline MicroStrategy disclosed several important financial vulnerabilities in a recent Form 8-K filed with the SEC. At the time of filing, the firm reported holding 528,185 BTC, acquired at an average purchase price of $67,458 per Bitcoin, for a total cost basis of approximately $35.63 billion. However, despite the massive size of its Bitcoin treasury, MicroStrategy admitted that its core enterprise software business has not been generating positive operational cash flow. The company is also shouldering $8.22 billion in debt and facing an annual contractual interest burden of $35.1 million. Related Reading Although it has issued over $1.6 billion in preferred stock tied to substantial annual dividend obligations of $146.2 million, these liabilities are not being met. Instead, MicroStrategy explicitly outlined that it expects to rely on debt or equity financing to meet its obligations, and those efforts may become severely strained if Bitcoin’s price sharply declines. The…
