MicroStrategy's stock has plunged over 55%, raising speculations about a possible forced liquidation. This is tied to its holding of 499,096 bitcoins worth $43.7 billion.
MicroStrategy's stock situation
MicroStrategy, heavily invested in Bitcoin, is seeing its stocks decline by over 55%. This decline has raised investor concerns about potential forced liquidation amidst shifts in the cryptocurrency market.
Company's Bitcoin strategy
Over years, MicroStrategy has been accumulating Bitcoin, with an average purchase cost of around $66,350 per BTC. The company relies on its ability to raise capital through selling shares and issuing convertible notes.
Risks and possible scenarios
Forced liquidation would likely require fundamental changes such as bankruptcy. However, Michael Saylor, co-founder and chairman, dismisses the likelihood of liquidation, even if Bitcoin falls to $1.
The current crypto market situation presents the first real challenge to MicroStrategy's strategy. The question remains whether investors will continue to support the company as values decline.
