MicroStrategy CEO Sheds Margin Call Woes As Bitcoin Nears $21,000

• Michael Saylor said his company had anticipated eventual bitcoin volatility and is prepared to “HODL through adversity.”

• MicroStrategy took out a $205 million bitcoin-backed loan from Silvergate Bank in March 2022 and risks getting margin called if bitcoin falls below $21,000.

• Saylor had previously tweeted that the company has 115,109 BTC as well as other assets available to post as collateral to avoid liquidation.

MicroStrategy, a software analytics company and the largest corporate holder of bitcoin, is dominating the news on Tuesday due to its risk of getting margin called in its $205 million bitcoin-backed loan.

The company’s risk became evident as bitcoin briefly fell below the loan’s margin call figure of $21,000 overnight. However, its CEO took to Twitter to assure investors that the company is well-positioned to not have to sell its bitcoin.

“When MicroStrategy adopted a #Bitcoin Strategy, it anticipated volatility and structured its balance sheet so that it could continue to #HODL through adversity,” Saylor said.

Saylor quote-tweeted a previous announcement from May 10 that further detailed the conditions of the loan as well as the company’s plan.

“MicroStrategy has a $205M term loan and needs to maintain $410M as collateral. $MSTR [MicroStrategy] has 115,109 BTC that it can pledge,” Saylor explained. “If the price of #BTC falls below $3,562 the company could post some other collateral.”

Silvergate Bank’s loan requires $410 million worth of collateral, which the company would fall short on if the price of bitcoin dipped below $21,000 – requiring MicroStrategy to add additional collateral to maintain the terms of the loan.

As explained by Saylor, MicroStrategy has enough bitcoin to put as collateral to fund the loan all the way down to a BTC price of $3,562. Were bitcoin to drop below that price point, the company intends to further collateralize with other assets.

MicroStrategy Kicks Off 2022 With $25M Bitcoin Buy

• MicroStrategy bought 660 more bitcoin for $25 million as the price dipped below $40,000 per coin.

• The software intelligence company now holds over 125,000 BTC in its treasury, bought for $3.78 billion.

• This is the first announced purchase of the year for the world’s largest corporate holder of bitcoin.

MicroStrategy, the software intelligence company that since 2020 has been accumulating bitcoin nonstop after its CEO Michael Saylor realized the digital currency’s store of value proposition, has made another millionaire purchase as the bitcoin price touches double-digit loss territory from the all-time highs set in November.

MicroStrategy added 660 BTC to its holdings for about $25 million in cash during the latest price dip in the peer-to-peer digital money between December 30 and January 31, averaging $37,865 per bitcoin, the company disclosed in a Form-8K filed with the Securities and Exchange Commission (SEC) on Tuesday.

The company now holds 125,051 BTC bought for an aggregate price of $3.78 billion, putting the average cost of each bitcoin purchased at around $30,200. At the time of writing, MicroStrategy’s bitcoin investment is over $1 billion in the green.

MicroStrategy has purchased an additional 660 bitcoins for ~$25.0 million in cash at an average price of ~$37,865 per #bitcoin. As of 1/31/22 we #hodl ~125,051 bitcoins acquired for ~$3.78 billion at an average price of ~$30,200 per bitcoin. $MSTRhttps://t.co/bF6VImC0Qy

— Michael Saylor⚡️ (@saylor) February 1, 2022

MicroStrategy’s relentless bitcoin accumulation strategy has made it top the list of corporations that hold bitcoin ever since it started acquiring BTC in 2020. On the other hand, second-place Tesla hasn’t added more bitcoin since its first purchase about one year ago. The electric car maker even sold 10% of its stash in the following months to test liquidity. Saylor’s company hasn’t ever sold any of its BTC –– and the chief executive has guaranteed they never will.

Saylor’s accumulation strategy also goes beyond MicroStrategy as the Bitcoin bull said in December that he personally owns over 17,000 bitcoin, worth roughly $680 million at current prices.

Bitcoin is currently trading close to $39,000 after briefly sliding below $33,000 last week.

MicroStrategy Adds 1,914 Bitcoin To Its Holdings

• MicroStrategy bought bitcoin yet again, the third big purchase in one month.

• The software company acquired 1,914 BTC for $94.2 million.

• Saylor’s firm now holds about 124,391 bitcoin, the largest bitcoin holding among corporations worldwide.

Software intelligence company MicroStrategy has “bought the dip” yet again, adding 1,914 bitcoin to its holdings at an average price of $49,229 per BTC. The company now holds 124,391 bitcoin, the largest corporate bitcoin holdings besides trusts and exchange-traded funds (ETFs).

MicroStrategy said in a Thursday filing with the U.S. Securities and Exchange Commission (SEC) that it had acquired almost two thousand new bitcoin between Dec. 9 and Dec. 29 for $94.2 million.

“MicroStrategy has purchased an additional 1,914 bitcoins for ~$94.2 million in cash at an average price of ~$49,229 per #bitcoin. As of 12/29/21 we #hodl ~124,391 bitcoins acquired for ~$3.75 billion at an average price of ~$30,159 per bitcoin,” MicroStrategy CEO Michael Saylor tweeted on Thursday to announce the purchase.

The purchase was funded in full by the selling of class A common stock by MicroStrategy during the same period. The company sold a total of 167,759 shares under a June open market sale agreement at an average price of $565.78 per share.

MicroStrategy’s bitcoin purchasing strategies are now quite common. The company indulges in new BTC every time the market bleeds, securing cheap bitcoin at a discounted price.

The acquisition comes after two significant purchases in the past month. On November 29, MicroStrategy announced it had purchased a massive $400 million worth of bitcoin, totaling 7,000 new BTC added to its holdings, right after the market began plunging. Under two weeks later, the software company added 1,434 more bitcoin to its stack in an $82 million purchase.