Bitcoin’s tumbling price is dragging down MicroStrategy’s stock.
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MicroStrategy
,
a software and Bitcoin holding company, was tumbling again as the price of the crypto continued to slide.
Shares of
MicroStrategy
(ticker: MSTR) were down 23% in trading Monday, to around $227 a share. The company held 129,218 Bitcoins on its balance sheet at the end of March, or about $4.1 billion at recent prices of $32,000 per coin. No other publicly traded U.S. operating company holds as much Bitcoin.
MicroStrategy stock is down 58% this year against a 30% slide in Bitcoin. The crypto has been especially weak lately, falling 7% in the past 24 hours.
The stock’s collapse reflects dwindling sentiment for “risk assets” such as tech. It also reflects a slide in Bitcoin and the effect of rising interest rates as the Federal Reserve tightens monetary policy, impacting the debt and loans on MicroStrategy’s books.
Led by CEO Michael Saylor, a relentless Bitcoin bull, MicroStrategy has amassed $2.4 billion in debt and loans, backing the issuance with Bitcoin and using the proceeds largely to buy more of the tokens.
On its earnings call last week, MicroStrategy indicated that it’s nowhere near facing a margin call—or requirements to shore up collateral. The company said it had 95,643 unencumbered Bitcoins, meaning they had not already been pledged as collateral.
Bitcoin…
