As Bitcoin prices keep falling, there will be a massive amount of ‘Saylor FUD’ in the crypto market that Michael Saylor, the CEO of MicroStrategy is going to sell his Bitcoin holdings.
Analysts Respond to Ongoing Saylor FUD
With the flagship cryptocurrency losing over 50% of its value in over a month many are wondering what if Bitcoin’s largest corporate holder, MicroStrategy will be forced to sell its holdings if the crypto asset continues on its downwards trends.
Responding to the ongoing “Saylor Fud”, an anonymous analyst has claimed that the “situation is not as dire”.
He started by saying that MicroStrategy’s latest bond issuance will only be secured on BTC that Saylor plans to accumulate on the proceeds from this issuance, suggesting even if the latest 400 million bid fails to support the market and there is liquidation, the 92,079 of BTC held by the company will not be at risk.
The analyst went further ahead to illuminate the company’s capital structure saying that the company has 2 outstanding bonds to be matured by 2025 and 2027 with the former at 0.75% interest and the other at none.
Only the 2025 bonds require interest to be paid on it with the outstanding amount at 650M with 0.75% of interest and $5 million to be paid annually in interest for their debts.
Michael Saylor Cannot Be Forced to Sell His Bitcoin
He further highlights that MicroStrategy generates around $50 million in net profit per year which means Saylor makes enough money to cover the annual interest by 10X:
“This means that from now till 2025 at least, Saylor CANNOT be liquidated as long as he pays the interest on the 0.75% 2025 bond.”
He points out that even Saylor will be forced out of his position as CEO, he owns 25% of MicroStrategy but also owns the majority of Class B shares which have 10x voting power giving him 72% of the voting power, indicating he cannot be forced by anybody to sell.
Lastly, he comes to three important conclusions. First, the latest round of purchase will not have the ability to liquidate his previous holdings; second, the interest rate is too low to put the company at risk, and third, nobody has the power to force him to sell.