Simply put
- Michael Saylor mentioned on CNBC that the company is speeding up its Bitcoin acquisitions.
- He noted that even if Bitcoin were to drop by 80%, their long-term strategy would remain intact.
- The market cap of the company has fallen below the current worth of its Bitcoin assets.
Michael Saylor, executive chairman of the company, dismissed rumors that they were selling Bitcoin. In a recent interview, he made it clear that their demand for Bitcoin remains strong, regardless of price fluctuations.
He emphasized that firms buying Bitcoin intend to keep growing their holdings, now valued at $62.3 billion, and they aren’t perturbed by the recent dips.
“We are increasing our Bitcoin purchases. You’ll hear more about our next acquisition on Monday,” he stated, indicating a definite acceleration in their buying strategy.
Meanwhile, some analysts speculated about potential selling based on chain activity. Crypto analytics firm Arkham suggested that this could mean the company is beginning to rely on Coinbase for custody.
A prediction market noted that earlier in the day, the likelihood of the company selling Bitcoin by 2025 had risen from 8% to 14%.
Analyst Lance Vitanza from TD Cowen remarked that the company historically refrains from selling Bitcoin, and while certain situations could compel a sale, he deemed this very improbable.
In theory, selling may be necessary for debt obligations, but Vitanza pointed out that the company’s convertible debts don’t mature until 2028.
Saylor mentioned that past sales involved early investors cashing out at price levels around $100,000 after long-term holds.
Last week, the company announced plans for euro-denominated preferred shares, expected to bring in $715 million.
The stock price for the company has dropped 32% in the last month, now trading around $204, as Bitcoin has significantly lost its gains this year. Currently, Bitcoin is around $96,365.
Saylor expressed cautious optimism about the current Bitcoin price, commenting that its recent drop could set the foundation for future gains but conceded that accurately forecasting year-end prices is challenging.
When questioned by a CNBC host about their purchasing strategy, Saylor said they are consistently looking to acquire more, although some periods might not align with fiscal quarter ends.
The company is combining its stock issuance with convertible bonds and preferred stock dividends to finance Bitcoin purchases.
Critics, including notable short sellers, have raised doubts about the sustainability of the company’s approach, yet Saylor remains confident.
He asserted that their balance sheet stands stable and even with an 80% drop in Bitcoin’s value, they would still be well-collateralized on their debt. The company has secured $8.2 billion through convertible debts as of Friday.
Thaler noted that dividend payments on preferred stocks have been officially declared, removing concerns about a potential credit default.
Vitanza supported this perspective, noting that while there’s no legal obligation to pay dividends, skipping them could hinder future stock offerings.
Additionally, the company faces a yearly dividend responsibility of about $735 million, which Vitanza believes is unlikely to become a significant issue.
These remarks from Saylor arrive at a time when their usual funding strategies seem less effective. Historically, they’ve issued stock to bolster their Bitcoin holdings by leveraging their market value against Bitcoin’s worth.
As of now, the company has a market cap of $59 billion while it holds Bitcoin valued at $62.3 billion, which presents a net asset value multiple of nearly 0.95 according to company records.
Editor’s note: This story was updated after publication to include analyst commentary.
