Strategy (MSTR) Crashes 55%—Is A $44 Billion Bitcoin Liquidation Possible?
Shares of MicroStrategy (NASDAQ: MSTR) have declined over 55% from a high of $543 to around $250. The company holds approximately 499,096 Bitcoin, valued at about $44 billion. Analysts question the possibility of forced liquidation of this Bitcoin treasury. MicroStrategy's average cost basis for Bitcoin is around $66,350. The firm has about $8.2 billion in total debt, with a leverage ratio of roughly 19%. Forced liquidation could occur only with a "fundamental change" at the company, such as bankruptcy or shareholder dissolution, which are considered unlikely due to Michael Saylor's significant voting power. Despite the share price drop, analysts deem outright forced liquidation "highly unlikely." However, if Bitcoin prices fall significantly and remain low, MicroStrategy may struggle to service its debt and raise capital. Saylor has dismissed liquidation concerns, emphasizing confidence in Bitcoin's value.
