MicroStrategy BTC sale signals credit rating agencies
The speakers argued that MicroStrategy's sale of a tiny fraction of its Bitcoin holdings was a strategic maneuver to demonstrate liquidity to credit rating agencies and prove the asset has tangible balance-sheet value.
The argument
Traditional rating agencies like S&P historically valued MicroStrategy's Bitcoin holdings at zero when assessing creditworthiness. By demonstrating the ability to monetize Bitcoin for cash to meet obligations like dividends rather than relying solely on equity dilution, the company aims to force rating agencies to recognize Bitcoin as a valid liquid asset.
The thesis, stress-tested
✓ What validates it
- ✓S&P or other credit rating agencies upgrade MicroStrategy's issuer credit rating
- ✓MicroStrategy successfully services future debt or dividends using Bitcoin liquidation proceeds without depressing the stock price
▸ Risks discussed
- ▸Rating agencies may continue to discount volatile crypto assets despite the signal
- ▸Short sellers may exploit any future equity dilution narratives
Hear it yourself
"But that's not gonna stop all the haters from coming out of the woodwork and saying that Michael Saylor has lost all faith. He no longer believes in Bitcoin. It is over. For example, take Peter Schiff. He says that last week, MicroStrategy sold 32 Bitcoin for about $2,500,000 at an average price of $77,135. Since Bitcoin's biggest buyer has now become a seller, where will the new demand come from to sustain the pyramid? Bitcoin's already below 72 k, which is about 7% below where Saylor sold. Now, of course, there's a lot of people here that Michael Saylor has sold."
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