MicroStrategy refutes margin call rumours and can “HODL through adversity”
Due to the bear market, rumours had arisen that Microstrategy had received a margin call
CEO and founder Michael Saylor confirmed that MicroStrategy can simply pledge more of their remaining 115,109 Bitcoin and other forms of collateral if need be
Michael Saylor, CEO and founder of MicroStrategy, has reported that the business intelligence software firm could “continue to HODL through adversity” amid market fluctuations. In late March, the largest corporate Bitcoin (BTC) holder took a $205 million bitcoin-backed loan from Silvegate Bank, which the firm used to purchase more BTC.
MicroStrategy’s CFO Phong Le reported on an earnings call in May that “Bitcoin needs to cut in half or around $21,000 before we’d have a margin call.” And due to the bear market, rumours that MicroStrategy had received a margin call against the loan from Silvergate Capital were beginning to arise. However, MicroStrategy has refuted this in an emailed statement to Reuters.
Saylor confirmed that if need be he can simply pledge more of Microstragy’s remaining 115,109 Bitcoin. MicroStrategy started to amass large amounts of BTC since 2020. And as of 7 May 2022, the company owns 129,218 bitcoins.
Saylor continued that if entirely pledged, the loan from Silvergate Capital can remain intact until the BTC price is as low as $3,562. And at this point, MicroStrategy would still be able to commit other forms of collateral if need be.
To learn more about Bitcoin, check out our learning resources.