- Michael Saylor’s Strategy, the largest Bitcoin Treasury, seems to have lost investor confidence.
- SRTC, the preferred share of Strategy, which is designed to remain at $100, depegs and crashes down to 88.
- MSTR, the ordinary share of Strategy, lost 30% price in the last 1 month.
- The company had previously sold 32 BTC as a test after years of preaching against selling Bitcoins.
Strategy Enters Rough Waters, Shares and Preferred Shares Nosedive
Strategy has lost nearly 30% of its share price in the last 20 days after a series of miscaculated actions and statements from its Chairman, Michael Saylor, and the CEO, Phong Le.
Despite preaching for years to not sell Bitcoin, Strategy sold 32 BTC in what it called a dividend-related sale. However, that sale turned out to be a test transaction, which contradicted Michael Saylor’s clarification statement a mere couple of days ago.
Michael Saylor Makes a Costly Mistake
Michael Saylor seems to have made the costliest mistake in his Bitcoin acquisition history (via Strategy) by first giving contradictory statements negating his earlier “Never Sell Your Bitcoin” stance. Further, he said that he never said that his company wouldn’t sell. Interestingly, an old video surfaced in which he said his company would never sell Bitcoin.
All of these actions have led to a degradation of investor trust in Strategy and Saylor, which resulted in the 30% crash in MSTR shares in the last 1 month.
A Look at Strategy’s Vitals
Strategy is currently in a bad position, where its net cost of Bitcoin acquisition came out to be $75,000 as compared to the current price of $63k, which means, due to its 845k Bitcoin reserve, it sits on the largest unrealized loss amongst all companies in the market.
If the price of Bitcoin drops to $50k levels, the net unrealized loss would further climb to 33% of the total acquisition cost. As a result, the investors and shareholders in Strategy would want a stake sale. This particular situation could put Strategy on the verge of bankruptcy.
Disclaimer: BFM Times acts as a source of information for knowledge purposes and does not claim to be a financial advisor. Kindly consult your financial advisor before investing.
