Nasdaq-listed US Software firm MicroStrategy (Symbol: MSTR), like Elon Musk’s Tesla, is one of the major Bitcoin players within the Bitcoin segment. The company has a market cap of some $2.7 and has purchased more than 129,000 bitcoins since August 2020. The company, co-founded by CEO Michael Saylor in 1989, first bought the cryptocurrency by converting $250 million of its cash holdings into 21,454 BTC. Since then, it has converted proceeds from the software business and €2.4 billion in debts to acquire Bitcoins.
$1.7 billion of the debt is in the senior convertible notes, at an interest rate of between 0% and 0.75%. The firm has also taken on $500 million worth of debt in senior secured notes that offer a 6.1% interest rate. The latest debt is a “first-of-its-kind” $205 million bitcoin-backed loan taken in April at an interest rate of roughly 4%.
The company’s total BTC holding is worth over $3.8 billion based on the current price of around $30,000, down from nearly $6 billion in December 2021.
Rumors said, that MicroStrategy could be facing a potential margin call if the BTC price fell below $21,000. However, Michael Saylor has previously said in a tweet that the company has “enough Bitcoin to put up as collateral” should it come to that.
MicroStrategy Chief Financial Officer Andrew Kang told The Wall Street Journal recently, that the company’s strategy to buy and hold bitcoin (BTC) for the long term won’t change despite the crypto downturn.