Michael Saylor claims that Strategy is prepared even for a very deep bearish scenario on bitcoin — and that the company's credit risk remains under control.
If bitcoin falls by 90% over the next four years, we will refinance the debt. We will simply extend it
— said Saylor, suggesting that the company has room to roll over obligations even in the case of an extreme drop in the value of BTC.
Strategy has over $8 billion in debt today, largely in the form of convertible bonds, while simultaneously controlling 714,644 BTC worth approximately $49 billion (at current prices). Saylor emphasizes that the company wants to buy bitcoin quarterly and has no plans to sell.
He also added that Strategy has no margin calls, and maintains about 2.25 billion USD in cash on the balance sheet, which — according to the company — should be sufficient to cover interest and dividends for over two years.
Paper losses are increasing
At the level of results, the situation looks difficult. In the latest report, the company showed a net loss of 12.4 billion USD for Q4 (largely due to the decline in the market valuation of held BTC). Strategy also signals that it does not expect profits this year.
On Tuesday, shares fell by about 2%, and bitcoin again dropped below 70,000 USD. Over a three-month period, Strategy's shares have overall decreased by more than 40%.
President Phong Le called on new investors to be patient:
Some of you bought bitcoin or MSTR last year — this is your first drop, I advise you to hold on
— he said during the earnings teleconference.
