Michael Saylor, founder and CEO of business intelligence software company MicroStrategy (MSTR), took to Twitter Tuesday morning in an attempt to clarify the company's obligations regarding its Bitcoin-backed loans.
"MicroStrategy has a $205 million loan and is required to post $410 million in collateral," Saylor said. Citing his company's Q1 investor presentation, Saylor noted that of the 129,218 Bitcoin (BTC) MicroStrategy owns, 115,109 (or more than $3 billion at current prices) remain unencumbered.
Bitcoin would have to fall to $3,562 before the company would no longer have enough cryptocurrency to pledge the loan, but even then MicroStrategy could put up other collateral, Saylor said. He implies that, in theory, there is hardly a price so low that his company would have to forcibly sell bitcoin.
The sharp downturn in the crypto market - last night Bitcoin fell below $30,000 for the first time since July 2021 - had driven up rumors of a margin call for MicroStrategy. In fact, outgoing CFO Phong Le said something like that during the company's earnings call last week, citing about $21,000 as the trigger.
However, Saylor's tweet and the presentation slides seem to make it clear that the company has an overwhelming amount of unencumbered bitcoin as additional collateral right now.
MicroStrategy shares fell nearly 26% yesterday in tandem with the bitcoin slump. Both are recovering slightly this morning, with MSTR up 6.4% and bitcoin back at $32,000.