Can the bears force Saylor to sell his Bitcoin? Shared theory of the analyst

In May, an alleged “insider” claimed that a group of Bitcoin whales was trying to liquidate a number of positions from a large player. Justin Sun, founder of the TRON blockchain, and Michael Saylor, CEO of software company MicroStrategy, were the top two suspected targets.

The rumor has spread when Saylor announced new purchases of BTC and issued more debt for the company to expand its BTC holdings. As recently reported, the company will use $ 1.6 billion obtained through a debt instrument to buy more Bitcoin.

With the cryptocurrency losing more than 50% of its value in more than a month, many wonder what will happen if the downtrends continue, will MicroStrategy’s position be compromised?

The anonymous analyst “degentrading” addressed this “Saylor Fud” and assures that the situation of the executive and his company “is not so serious”. The analyst saying:

The latest bond issue will only have senior collateral in the BTC that you plan to accumulate on the proceeds of this issue. IE: Even if this 400M offering does not support the market and there is liquidation, the 92,079 BTC held will NOT be at risk.

The analyst delved further into MicroStrategy’s capital structure. The company has 2 outstanding bonds maturing in 2025 and 2027. The first has a 0.75% stake and the other has none, as seen below.

Source: Degentrading (@hodlKRYPTONITE)

Will MicroStrategy sell its bitcoins (BTC)?

The software company must pay about $ 5 million annually in interest on its debts. As the analyst concluded, MicroStrategy generates about $ 50 million in net profit per year. In theory, the company can pay its financial commitments.

This means that from now until 2025, at least, Saylor CANNOT be liquidated as long as he pays the interest on the 0.75% 2025 bond.

Other users claim that Michael Saylor could be forced to step down as CEO. The company could then sell its Bitcoin, in the event of a major crash in the crypto market. With over 90,000 BTC in its treasury, this would create enough selling pressure to push the price of BTC further down.

However, Saylor owns 25% of the business and 72% of the shares with 10 times the voting power, as the analyst found: “Saylor CANNOT be forced by anyone to sell.”

Degentrading reached three important conclusions. First, the most recent debt acquired by MicroStrategy will not have an effect on your overall Bitcoin holding; the company cannot be removed from office. Second, the interest rate is too low to put the business at risk.

Finally, Saylor has enough control over the board, due to his high voting power, to maintain his position as CEO and maintain his BTC.

As the chart below shows, MicroStrategy (MSTR) shares were once valued at $ 3,000 during 2000. By the end of that year, the company lost 99.6% of its value until its announcement of the purchase of BTC in 2020. .

Bitcoin BTC BTCUSD
Source: Degentrading (@hodlKRYPTONITE)

For more than two decades, as the analyst put it, Saylor has held his position. The recent drop in the price of Bitcoin is nothing more than a “bump” in the executive’s history with the market.

At the time of this writing, BTC is trading at $ 36,553 with gains on the lower time frames, but big losses on the 2-week and 30-day charts.

Bitcoin BTC BTCUSD
BTC with bullish momentum on the 24-hour chart Source: BTCUSD Tradingview

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