MicroStrategy holds 528K BTC at risk as debt pressure builds
According to a recent SEC filing, MicroStrategy disclosed that it may be forced to sell part of its Bitcoin (CRYPTO:BTC) holdings if financial pressures continue and Bitcoin’s price declines further.
The firm currently holds 528,185 BTC at an average purchase price of $67,458, with a total cost basis of approximately $35.63 billion.
Despite this substantial position, the company’s software business is not generating positive operational cash flow and is weighed down by $8.22 billion in debt.
The company faces annual interest obligations of $35.1 million and additional preferred stock dividend liabilities of $146.2 million.
According to the Form 8-K, MicroStrategy stated that it expects to rely on debt or equity financing to meet these obligations.
However, if Bitcoin's market value falls significantly, this financing strategy could be at risk.
The filing warns that in such a scenario, MicroStrategy may be forced to sell Bitcoin at a loss to meet financial demands.
At the time of the report, Bitcoin was trading only about 13% above MicroStrategy’s average purchase price, narrowing the margin for downside risk.
Due to the concentration of Bitcoin on its balance sheet, any significant decline in BTC price could negatively affect MicroStrategy's ability to raise funds, and potentially impact the broader Bitcoin market.
Following the filing’s release, Michael Saylor, co-founder and former CEO of MicroStrategy, addressed the concerns by posting on X (formerly Twitter), stating simply: “HODL.”
“Bitcoin is the Best Idea. There is no Second Best,” he later reiterated.
Saylor’s response emphasised the company’s continued long-term stance on Bitcoin despite the disclosed financial stress.
At the time of reporting, the Bitcoin price was $80,183.65.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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