Key facts
- MicroStrategy's debt exceeded its combined Bitcoin and cash reserves by $300 million in late 2022.
- The company has since raised $60 billion in capital.
- MicroStrategy acquired an additional 716,000 Bitcoin with the raised capital.
- The company's current reserves now exceed its debt by $48 billion.
Michael Saylor, Co-founder and Executive Chairman of MicroStrategy, has reflected on the company's most challenging financial period in late 2022. At that time, MicroStrategy's debt exceeded its combined Bitcoin and cash reserves by $300 million. Saylor noted that in 2022, the BTC price traded near $20,000, and they held 130,000 BTC worth about $2.6 billion. The MSTR stock traded at $24, split-adjusted, while BTC fell below $16,000, leading to their debt exceeding reserves and MSTR stock crashing to $13 by year-end.
Following this critical juncture, the company undertook a significant capital raise, securing $60 billion. This infusion of capital enabled MicroStrategy to acquire an additional 716,000 Bitcoin. Saylor noted that their BTC and USD reserves now exceed their debt by approximately $48 billion. He also mentioned that Strategy has raised over $60 billion of additional capital and invested it in BTC since 2022.
Saylor's statements come amid recent criticisms of the company's Bitcoin accumulation model, with MicroStrategy selling MSTR and STRC shares to buy more BTC. The STRC stock recently fell to a record low of around $83, down from its $100 par value. Bitcoin critic Peter Schiff floated an investor lawsuit against Strategy and Saylor as STRC dropped to record lows, opining that Saylor may be guilty of fraud for violating SEC marketing rules. However, Fox and Sky News contributor David Gokhshtein defended Saylor, calling comparisons to Do Kwon and Terra Luna "insane" and stating Bitcoin's price is not Saylor's fault. Bitcoin advocate Samson Mow also defended Saylor, describing STRC as a "brilliant instrument."