© Reuters
Investing.com – MicroStrategy is the quintessential bitcoin company. It’s actually a software maker, but its founder, Michael Saylor, has been buying up significantly in recent years to make the company less attractive for competitive takeovers.
Until recently, it seemed like this strategy was great. But the recent fall of bitcoin poses unsuspected risks to the sustainability of the activity. On Monday, the stock price reacted to the fall in BTC with a 25% discount, taking it to its lowest level since October 2020.
At the beginning of May, the president of MicroStrategy (NASDAQ:), Phong Le, further declared:
“Bitcoin needs to halve, to around $21,000, before we have a margin call.”
At the time this statement was made, few expected this price level to be reached. Yet, less than six weeks later, we’re at exactly the same point, which has certainly created a few worry lines on the management’s forehead.
As of May 2, the company held 129,218 bitcoins, purchased at an average price of $30,700.
By Marco Oehrl