Billionaire Michael Saylor Addresses Margin Call Concerns on MicroStrategy’s Substantial Bitcoin (BTC) Position

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Billionaire Michael Saylor Addresses Margin Call Concerns on MicroStrategy’s Substantial Bitcoin (BTC) Position

MicroStrategy co-founder and Michael Saylor is responding to fears that a part of the ’s  (BTC) holdings purchased using could be liquidated.

In a CNBC interview, Saylor says a call is highly unlikely given the Bitcoin (BTC) position MicroStrategy acquired using debt is adequately collateralized.

“On a multi- Billion dollar balance sheet, we only have got a $200 Million that we have to collateralize. And we are 10x over-collateralized on it right now.

If traded down by a factor of 10, we’ve got cash and we generate cash flow.

The margin call is much ado about nothing, it’s just me Twitter-famous. So I appreciate that. And the Twitter trolls love to beat up on me because it gets them engagement.”

In a margin call, a trader or investor is required to put up more funds to avert the closure or of a leveraged position.

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The MicroStrategy CEO reveal most of the enterprise software firm’s debt is manageable as it was taken out before interest prices were hiked.

“As for the ’s balance sheet strategy in general, we borrowed $2.2 Billion at a blended interest price of 1.8 percent before interest prices doubled…

If you had an opportunity to grab $2 Billion at 1.5 percent interest, it seems like a reasonable thing to do and I’m glad we did it. Most of it is unsecured debt – $1.7 Billion of it is unsecured. The $500 Million comes due in 7 after we borrowed the money.

So we feel like we have a fortress balance sheet, we’re comfortable and the margin loan is well managed.”

Bitcoin is for $21,030 at time of writing. MicroStrategy holds 129,218 Bitcoin (BTC) bought at an average price of approximately $30,700, translating to paper losses of about $1.25 billion.


Featured Image: Shutterstock/Natalia Siiatovskaia/urzine

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