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Will MicroStrategy sell their Bitcoin?

Will Saylor sell his Bitcoin stash?

Last May, a suspected “insider” claimed that a group of Bitcoin Whales have been trying to get a number of positions liquidated from an enormous player. The founder of TRON, Justin Sun, and Michael Saylor, CEO of MicroStrategy were both suspect targets.

The rumor continues as Saylor announced new BTC purchases and then issued more debt for the company to expand its BTC holdings. The company will also use the $1.6 billion acquired through a debt instrument to purchase more Bitcoin.

Now that the cryptocurrency is losing more than 50% of its value in over a month. Many are speculating what could happen if the downtrends continue. Is the MicroStrategy’s position compromised?

An analyst tackled this and claims that the executive’s and his company’s situation is “not as dire.”

“The latest bond issuance will only be senior secured on the BTC that he plans to accumulate on the proceeds from this issuance. I.E – Even if this 400M bid fails to support the market and there is liquidation – the 92,079 of BTC held will NOT be at risk.”

The analyst went deep further on MicroStrategy’s capital structure. The company now has two outstanding bonds to be fully developed by 2025 and 2027.

No more Bitcoin for MicroStrategy?

The analyst concluded that the company must pay nearly $5 million yearly as an interest for their debts. MicroStrategy generates nearly $50 million in net profit every year. As a theory, the company can pay for its financial commitments.

This indicates that from now until 2025, Saylor can’t be liquidated as long as he pays the interest on the 0.75% 2025 bond.

microstrategy

Some users say that Michael Saylor can be forced out of his position as CEO. After that, the company will be free to sell their Bitcoin, in case of a major drop in the crypto market. With more than 90,000 BTC in their treasury, this could create enough selling pressure to drive BTC’s price down even further.

But Saylor is the owner of 25% of the company and he holds 72% of the shares with 10x voting power. The analyst discovered: “Saylor CANNOT be forced by anybody to sell.”

The analyst reached three important conclusions.

  • First, the current debt acquired by MicroStrategy won’t have an effect on the overall Bitcoin holding. Hence, the company can’t be liquidated out of its position.
  • Second, the interest rate is very low to put the company at risk.
  • Lastly, Saylor has enough control on the board. This is because of his high voting power, to keep his position as CEO and hold their BTC.

MicroStrategy’s Earnings

MicroStrategy shares have once been valued at $3,000 in 2000. By the end of that year, the company lost 99.6% of its value until their BTC purchase announcement in 2020.

Saylor has held his position for over twenty years. The current crash in Bitcoin’s price is just a “blip” in the executive’s history with the market.

As of now, BTC trades at $36,553 with gains in the lower time frames, however, heavy losses in the 2 week and 30-day charts.

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