MicroStrategy CEO Resigns, What’s the Fate of 129,000 Bitcoin?

Cryptoharian – Michael Saylor, who is the founder and CEO of the company MicroStrategy, is known to have stepped down to become Chief Executive. MicroStrategy said Saylor will focus on innovation and the company’s long-term strategy, while continuing to provide oversight to the Company’s bitcoin acquisition strategy.

Meanwhile, the current CEO position is held by Phong Le, who previously served as company president.

“As the company’s Chief Executive, I can focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives. Mr Phong will be empowered as CEO, to manage the company’s overall operations,” Saylor said in a statement Tuesday (2/8/2022).

Saylor’s resignation raises his own suspicion that he will focus on one thing that is the crisis of his company’s loss. That’s because MicroStrategy’s report on quarterly results were lighter than Wall Street’s forecast on Tuesday, with revenue coming in at $122.1 million against expectations for $126 million.

Losses for the quarter totaled $918.1 million, with $917.8 million attributable to the company’s bitcoin holdings.

At the end of the second quarter, the bearer value of MicroStrategy’s digital assets (approximately 129,699 bitcoins) was US$1.988 billion. This reflects a cumulative impairment loss of US$1.989 billion since acquisition and an average number of bearers per bitcoin of approximately $15,326.

MicroStrategy’s original cost base and bitcoin market value were US$3.977 billion and US$2.451 billion, respectively, reflecting the average cost per Bitcoin of around US$30,664 and the market price per bitcoin of US$18,895.02, respectively.

While not reflecting the current value of the company’s Bitcoin investments, the decline in value offers the latest evidence of how rough the crypto market can be, for one of the largest bitcoin corporate holders.

As of Wednesday (3/8/2022), Bitcoin price has recovered 23% from a low of US$17,708 per coin on June 17 although it remains 67% below that of ATH.

Since August 2020, MicroStrategy has purchased 129,699 Bitcoins at an average price of US$30,664 per coin. When Bitcoin hit an all-time high of US$68,000 per coin in November 2021, the total value of the company’s Bitcoin holdings was around $8 billion. With Bitcoin trading at a price of US$23,000 per coin, the holdings would amount to around US$2.9 billion.

The company has also acquired 421 Bitcoins for US$20,000. On the other hand, Chief Financial Officer Andrew Kang said that 14,000 Bitcoins are held by parent company MicroStrategy, with the remaining 115 Bitcoins held by subsidiary MacroStrategy. Of these, 85,000 Bitcoins are undisbursed and unencumbered.

“We have more than adequate guarantees for any price volatility. The cost of impairment of digital assets in each quarter is always greater than the loss of non-GAP operations. This means that Bitcoin volatility is a major factor on the loss side of the company’s balance sheet,” he said. [St]

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