MicroStrategy Inc. (NASDAQ: MSTR) stock value dropped 55% from its peak of $543 on November 24 to about $250. People speculate about a probable need for MicroStrategy to sell its Bitcoin stack since the business intelligence company owns 499,096 units with an estimated worth of $44 billion.
On Tuesday, The Kobeissi Letter analysts posted on X to explain why and how MicroStrategy would need to sell Bitcoin in case of financial trouble. People wonder whether MicroStrategy will have to sell part of its assets after its stock price dropped by 55%.
The MicroStrategy liquidation:
As MicroStrategy, $MSTR, falls over -55%, many are asking about “forced liquidation.”
The company now holds $44 BILLION worth of Bitcoin, could they be forced to sell it?
Is liquidation even possible? Let us explain.
(a thread) pic.twitter.com/GcDZVu2gVa
— The Kobeissi Letter (@KobeissiLetter) February 25, 2025
Could MicroStrategy Be Forced to Sell Its Bitcoin?
The enterprise holds 44 billion dollars worth of Bitcoin today. Must they sell their large Bitcoin holdings at this point? The analysts doubt if liquidating MicroStrategy’s huge Bitcoin holdings could be done.
MicroStrategy purchased most of its Bitcoin using funds raised through conversion notes. The business receives its profits mainly from the price movement in Bitcoin because each coin costs it about $66,350 on average. The current higher-than-threshold Bitcoin value lets the company operate well but financial trouble may arise when prices drop.
Today MicroStrategy holds $8.2 billion in debt placing its finances under 19% leverage. The Kobeissi Letter shows that MicroStrategy holds most of its debt in convertible notes with expiration dates in 2028. The company benefits from financial stability through these notes but they increase concerns about its long-term success when Bitcoin prices steadily drop.
According to the analysts a fundamental shift inside MicroStrategy would be required before they have to sell their assets. Organizational bankruptcy or shareholder-facilitated decisions to disband the company face very little chance of happening according to existing procedures.
Michael Saylor’s Control Over Bitcoin Strategy
Michael Saylor, MicroStrategy’s Executive Chairman and a staunch Bitcoin advocate, plays a pivotal role in the company’s financial decision-making. Saylor directs the direction of MicroStrategy because his 46.8% stake grants him the authority needed to handle corporate transactions including the sale of Bitcoin assets.
The executive holds his viewpoint securely that the company must keep its Bitcoin holdings. Mr. Saylor has told media that if Bitcoin falls to $1 in value MicroStrategy would spend its remaining cash reserves to acquire all available Bitcoin on the market. While his strong Bitcoin belief shows his confidence he still needs to fulfill convertible noteholder financial obligations.
MicroStrategy’s strategy hinges on investor confidence. The company makes use of market opportunities to get more Bitcoin through successful stock offerings when market performance showsbuyer confidence. The company will face investment problems if the stock market performance weakens and Bitcoin remains unstable.
According to the Kobeissi Letter MicroStrategy remains safe from liquidation as long as Bitcoin holds its price above half of its current value and stays above the firm’s average entry point through multiple market cycles. Thanks to his voting control and convertible note duration Saylor effectively blocks a sudden forced asset sale today.
Following its Bitcoin ascent to fame MicroStrategy now faces its first important bear market run and investors want to know if this drop represents a good purchasing chance or a serious sign.
Saylor persists in promoting Bitcoin bargains at present yet investor faith in the business’s heavy Bitcoin acquisition plans remains uncertain due to its rising debt and market fluctuations.
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